Proposed Rule2021-13993
Patient Protection and Affordable Care Act; Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 1, 2021
Issuing agencies
Treasury DepartmentHealth and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule sets forth proposed revised 2022 user fee rates for issuers offering qualified health plans (QHPs) through Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the Federal platform (SBE-FPs); proposes repeal of separate billing requirements related to the collection of separate payments for the portion of QHP premiums attributable to coverage for certain abortion services; proposes to expand the annual open enrollment period and Navigator duties; proposes a new monthly special enrollment period for qualified individuals or enrollees, or the dependents of a qualified individual or enrollee, who are eligible for advance payments of the premium tax credit (APTC) and whose household income does not exceed 150 percent of the federal poverty level (FPL); proposes to repeal the recent establishment of a Direct Enrollment option for Exchanges; and proposes to modify regulations and policies related to section 1332 waivers.
Full Text
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<title>Federal Register, Volume 86 Issue 124 (Thursday, July 1, 2021)</title>
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[Federal Register Volume 86, Number 124 (Thursday, July 1, 2021)]
[Proposed Rules]
[Pages 35156-35216]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-13993]
[[Page 35155]]
Vol. 86
Thursday,
No. 124
July 1, 2021
Part II
Department of the Treasury
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31 CFR Part 33
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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45 CFR Parts 147, 155 and 156
Patient Protection and Affordable Care Act; Updating Payment
Parameters, Section 1332 Waiver Implementing Regulations, and Improving
Health Insurance Markets for 2022 and Beyond Proposed Rule; Proposed
Rule
Federal Register / Vol. 86 , No. 124 / Thursday, July 1, 2021 /
Proposed Rules
[[Page 35156]]
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DEPARTMENT OF THE TREASURY
31 CFR Part 33
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
45 CFR Parts 147, 155 and 156
[CMS-9906-P]
RIN 0938-AU60
Patient Protection and Affordable Care Act; Updating Payment
Parameters, Section 1332 Waiver Implementing Regulations, and Improving
Health Insurance Markets for 2022 and Beyond Proposed Rule
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. Department
of the Treasury.
ACTION: Proposed rule.
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SUMMARY: This proposed rule sets forth proposed revised 2022 user fee
rates for issuers offering qualified health plans (QHPs) through
Federally-facilitated Exchanges (FFEs) and State-based Exchanges on the
Federal platform (SBE-FPs); proposes repeal of separate billing
requirements related to the collection of separate payments for the
portion of QHP premiums attributable to coverage for certain abortion
services; proposes to expand the annual open enrollment period and
Navigator duties; proposes a new monthly special enrollment period for
qualified individuals or enrollees, or the dependents of a qualified
individual or enrollee, who are eligible for advance payments of the
premium tax credit (APTC) and whose household income does not exceed
150 percent of the federal poverty level (FPL); proposes to repeal the
recent establishment of a Direct Enrollment option for Exchanges; and
proposes to modify regulations and policies related to section 1332
waivers.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by July 28, 2021.
ADDRESSES: In commenting, please refer to file code CMS-9906-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-9906-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-9906-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
Alper Ozinal, (301) 492-4178, Adrianne Patterson, (410) 786-4178,
Jacquelyn Rudich, (301) 492-5211, or Nora Simmons, (410) 786-1981, for
general information.
Gian Johnson, (301) 492-4323, or Meredyth Woody, (301) 492-4404,
for matters related to Navigator program standards.
Robert Yates, (301) 492-5151, for matters related to the Exchange
Direct Enrollment option for Federally-facilitated Exchanges, State-
based Exchanges on the Federal platform, and State Exchanges.
Carly Rhyne, (301) 492-4188, or Aziz Sandhu, (301) 492-4437, for
matters related to open enrollment.
Carolyn Kraemer, (301) 492-4197, for matters related to special
enrollment periods for Exchange enrollment under parts 147 and 155.
Nikolas Berkobien, (989) 395-1836, for matters related to
standardized options.
Aaron Franz, (410) 786-8027, or Nora Simmons, (410) 786-1981, for
matters related to user fees.
Rebecca Bucchieri, (301) 492-4341, for matters related to provision
of essential health benefits and separate billing and segregation of
funds for abortion services.
Erika Melman, (301) 492-4348, Deborah Hunter, (410) 786-0625, or
Emily Martin, (301) 492-4400, for matters related to network adequacy.
Lina Rashid, (202) 260-6098, Michelle Koltov, (301) 492-4225, or
Kimberly Koch, (202) 622-0854 for matters related to section 1332
waivers.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post comments received before the close of the comment period on the
following website as soon as possible after they have been received:
<a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the search instructions on that
website to view public comments. CMS will not post on <a href="http://Regulations.gov">Regulations.gov</a>
public comments that make threats to individuals or institutions or
suggest that the individual will take actions to harm the individual.
CMS continues to encourage individuals not to submit duplicative
comments. We will post acceptable comments from multiple unique
commenters even if the content is identical or nearly identical to
other comments.
Table of Contents
I. Executive Summary
II. Background
A. Legislative and Regulatory Overview
B. Stakeholder Consultation and Input
C. Structure of Proposed Rule
III. Provisions of the Updating Payment Parameters and Improving
Health Insurance Markets for 2022 and Beyond Proposed Rule
A. Part 147--Health Insurance Reform Requirements for the Group
and Individual Health Insurance Markets
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
C. Part 156--Health Insurance Issuer Standards Under the
Affordable Care Act, Including Standards Related to Exchanges
IV. Provisions of the Proposed Rule for Section 1332 Waivers
A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers
V. Collection of Information Requirements
A. ICRs Regarding Navigator Program Standards (Sec. 155.210)
B. ICRs Regarding Segregation of Funds for Abortion Services
(Sec. 156.280)
C. ICRs Regarding Section 1332 Waivers (31 CFR Part 33 and 45
CFR Part 155)
D. Submission of PRA Related Comments
VI. Response to Comments
VII. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Impact Estimates of the Payment Notice Provisions and
Accounting Table
D. Regulatory Alternatives Considered
E. Regulatory Flexibility Act
F. Unfunded Mandates
G. Federalism
H. Congressional Review Act
I. Executive Summary
American Health Benefit Exchanges, or ``Exchanges,'' are entities
established under the Patient Protection and Affordable Care Act (ACA)
\1\ through
[[Page 35157]]
which qualified individuals and qualified employers can purchase
comprehensive health insurance coverage through qualified health plans
(QHPs). Many individuals who enroll in QHPs through individual market
Exchanges are eligible to receive a premium tax credit (PTC) to reduce
their costs for health insurance premiums and to receive reductions in
required cost-sharing payments to reduce out-of-pocket expenses for
health care services. This notice proposes rules and policies designed
to promote greater access to comprehensive health insurance coverage
through the Exchanges, consistent with applicable law and with the
administration's policy priorities detailed in recent Presidential
executive orders.
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\1\ The Patient Protection and Affordable Care Act (Pub. L. 111-
148) was enacted on March 23, 2010. The Healthcare and Education
Reconciliation Act of 2010 (Pub. L. 111-152), which amended and
revised several provisions of the Patient Protection and Affordable
Care Act, was enacted on March 30, 2010. In this proposed rule, we
refer to the two statutes collectively as the ``Affordable Care
Act'' or ``ACA.''
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On January 28, 2021, the President issued Executive Order 14009,
``Executive Order on Strengthening Medicaid and the Affordable Care
Act'' (E.O. 14009), which stated the Administration's policy to protect
and strengthen the ACA and to make high-quality health care accessible
and affordable for every American.\2\ This Executive Order instructed
the Secretary of Health and Human Services (hereinafter referred to as
``the Secretary''), along with the Secretaries of the Departments of
Labor and the Treasury, to review all existing regulations, guidance
documents, and other agency actions to determine whether they are
consistent with the aforementioned policy, and to consider whether to
suspend, revise, or rescind any agency actions that are inconsistent
with it.
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\2\ 86 FR 7793 (Feb. 2, 2021).
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On January 20, 2021, President Biden issued Executive Order 13985,
``On Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government'' (E.O. 13985),\3\ directing that as a
policy matter, the federal government should pursue a comprehensive
approach to advancing equity for all, including people of color and
others who have been historically underserved, marginalized, and
adversely affected by persistent poverty and inequality. E.O. 13985
also directs HHS to assess whether, and to what extent, its programs
and policies perpetuate systemic barriers to opportunities and benefits
for people of color and other underserved groups.
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\3\ 86 FR 7009 (Jan. 25, 2021).
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Today, of the 30 million uninsured, half are people of color.\4\ Of
those that have insurance, there are frequently barriers to using
insurance because of affordability concerns related to premiums,
deductibles, copayments, and coinsurance, as well as challenges related
to health literacy and the ability for the insured to find and access
in-network providers. These barriers to using insurance are
particularly problematic for those with chronic conditions and
individuals with social risk factors (such as poverty, minority race
and/or ethnicity, social isolation, and limited community
resources),\5\ which also includes members of underserved communities,
people of color, and others who have been historically underserved,
marginalized, and adversely affected by persistent poverty and
inequality. The COVID-19 public health emergency (PHE) has highlighted
the negative effects of these circumstances as COVID-19 has unequally
affected many racial and ethnic minority groups, putting them more at
risk of getting sick and dying from COVID-19.\6\
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\4\ ``Health Insurance Coverage: Early Release of Estimates From
the National Health Interview Survey, January-June 2020,'' National
Center for Health Statistics, February 2021, available at <a href="https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur202102-508.pdf">https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur202102-508.pdf</a>.
\5\ See ``Social Risk Factors and Medicare's Value-Based
Purchasing Programs,'' HHS Office of the Secretary of Planning and
Evaluation, available at <a href="https://aspe.hhs.gov/social-risk-factors-and-medicares-value-based-purchasing-programs">https://aspe.hhs.gov/social-risk-factors-and-medicares-value-based-purchasing-programs</a>.
\6\ See Centers for Disease Control and Prevention, ``Health
Equity Considerations and Racial and Ethnic Minority Groups,''
updated April 19, 2021, available at <a href="https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html#print">https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html#print</a>.
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As part of its review of regulations and policies under the
Executive Orders described in the preceding paragraphs, HHS examined
certain policies and requirements addressed in this proposed rule to
analyze whether they are consistent with policy goals outlined in the
Executive Orders, including whether they might create or perpetuate
systemic barriers to obtaining health insurance coverage. The results
of our examinations and analyses led to the policies and rules proposed
in this rule.
In previous rulemakings, HHS established provisions and parameters
to implement many ACA requirements and programs. In this proposed rule,
we propose to amend and repeal some of these provisions and parameters,
with a focus on making high-quality health care accessible and
affordable for consumers. These proposed changes would provide
consumers greater access to coverage through, for example, greater
education and outreach, improve affordability for consumers, reduce
administrative burden for issuers and consumers, and improve program
integrity. As discussed more fully later in the preamble, each of these
measures would strengthen the ACA or otherwise promote the policy goals
outlined in the Executive Orders described above.\7\
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\7\ Although many of the policies proposed in this rule support
the goals outlined in recent Executive Orders, as described later in
the preamble discussions related to individual proposals, each of
the proposals is supported by statutory authority independent of the
Executive Orders.
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We propose to amend Sec. 147.104(b)(2) to specify that issuers are
not required to provide a special enrollment period in the individual
market with respect to coverage offered outside of an Exchange to
qualifying individuals who would be eligible for the proposed special
enrollment period triggering event at Sec. 155.420(d)(16) described
below.
We also propose to amend Sec. 155.210(e)(9) to reinstitute
previous requirements that Navigators in FFEs be required to provide
consumers with information and assistance on certain post-enrollment
topics, such as the Exchange eligibility appeals process, the Exchange-
related components of the PTC reconciliation process, and the basic
concepts and rights of health coverage and how to use it.
We also propose to remove Sec. 155.221(j) and repeal the Exchange
Direct Enrollment option which establishes a process for State
Exchanges, State-based Exchanges on the Federal platform, and
Federally-facilitated Exchanges to work directly with private sector
entities (including QHP issuers, web-brokers, and agents and brokers)
to operate enrollment websites through which consumers can apply for
coverage, receive an eligibility determination from the Exchange, and
purchase an individual market QHP offered through the Exchange with
APTC and cost-sharing reductions (CSRs), if otherwise eligible.
For the 2022 coverage year and beyond, we propose to amend Sec.
155.410(e) to lengthen the annual open enrollment period for coverage
through all Exchanges to November 1 through January 15, as compared to
the current annual open enrollment period of November 1 through
December 15.
We propose to add a new paragraph at Sec. 155.420(d)(16) to
establish a monthly special enrollment period for qualified individuals
or enrollees, or the dependents of a qualified individual or enrollee,
who are eligible for APTC, and whose household income does not exceed
150 percent of the FPL, in order to provide low-income individuals who
generally will have access to a
[[Page 35158]]
premium-free silver plan with a 94 percent actuarial value (AV) with
more opportunities to enroll in coverage. We also propose to clarify,
for purposes of the special enrollment periods provided at Sec.
155.420(d), that a qualified individual who meets the criteria at Sec.
155.305(f), but who qualifies for a maximum APTC amount of zero
dollars, is not considered APTC eligible. This approach would ensure
that Sec. 155.420 very clearly reflects appropriate special enrollment
period eligibility for qualifying individuals who qualify for a maximum
APTC amount of zero dollars and for those who become eligible for APTC
amounts greater than zero.
In addition, to reflect updated analysis of enrollment and the cost
of expanded services offered through the Federal platform, we propose
to set the 2022 user fee rate at 2.75 percent of total monthly premiums
charged by the issuer for each policy under plans offered through an
FFE, and 2.25 percent of the total monthly premiums charged by the
issuer for each policy under plans offered through an SBE-FP (rather
than 2.25 and 1.75 percent of the total monthly premiums charged by the
issuer for each policy under plans offered through an FFE or SBE-FP,
respectively, as finalized in part 1 of the 2022 Payment Notice final
rule). These proposed 2022 user fee rates are still less than the 2021
user fees currently being collected--3.0 and 2.5 percent of the total
monthly premiums charged by the issuer for each policy under plans
offered through an FFE or SBE-FP, respectively.
We also propose a technical amendment to requirements at Sec.
156.115(a)(3) pertaining to the provision of the essential health
benefits (EHB), to include a cross-reference to the Public Health
Service (PHS) Act to make clear that health plans subject to EHB
requirements must comply with all of the requirements under Mental
Health Parity and Addiction Equity Act of 2008 (MHPAEA), including any
amendments to MHPAEA.
We also propose to repeal the separate billing regulation at Sec.
156.280(e)(2), which requires individual market QHP issuers that offer
coverage of abortion services \8\ for which federal funds are
prohibited to separately bill for this portion of the policy holder's
premium and to instruct the policy holder to pay for the separate bill
in a separate transaction. Specifically, we are proposing to revert to
and codify prior policy finalized in the 2016 Payment Notice \9\ such
that QHP issuers offering coverage of abortion services for which
federal funds are prohibited again have flexibility in selecting a
method to comply with the separate payment requirement in section 1303
of the ACA. Under this proposal, individual market QHP issuers covering
abortion services for which federal funds are prohibited would still be
expected to comply with all statutory requirements in section 1303 of
the ACA and all applicable regulatory requirements codified at Sec.
156.280.
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\8\ These abortion services refer to abortion coverage that is
subject to the Hyde Amendment's funding limitations which prohibit
the use of federal funds for such coverage.
\9\ 80 FR 10750.
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This proposed rule also proposes modifications to the section 1332
Waivers for State Innovation (referred to throughout the preamble to
this proposed rule as section 1332 waivers) implementing regulations,
including changes to many of the policies and interpretations of the
guardrails recently codified in regulation. As outlined in this
proposed rule, the policies and interpretations proposed in this rule,
if finalized, would supersede and rescind those outlined in the October
2018 ``State Relief and Empowerment Waivers'' guidance \10\
(hereinafter referred to as the ``2018 Guidance'') and repeal the
previous codification of the interpretations of statutory guidelines in
part 1 of the 2022 Payment Notice final rule. HHS and the Department of
the Treasury (collectively, the Departments) also propose to modify
regulations to set forth flexibilities in the public notice
requirements and post award public participation requirements for
section 1332 waivers under certain emergent situations. The Departments
also propose in this rule processes and procedures for amendments and
extensions for approved waiver plans.
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\10\ 83 FR 53575.
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II. Background
A. Legislative and Regulatory Overview
Title I of the Health Insurance Portability and Accountability Act
of 1996 (HIPAA) added a new title XXVII to the PHS Act to establish
various reforms to the group and individual health insurance markets.
These provisions of the PHS Act were later augmented by other laws,
including the ACA. Subtitles A and C of title I of the ACA reorganized,
amended, and added to the provisions of part A of title XXVII of the
PHS Act relating to group health plans \11\ and health insurance
issuers in the group and individual markets. The term ``group health
plan'' includes both insured and self-insured group health plans.
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\11\ The term ``group health plan'' is used in title XXVII of
the PHS Act and is distinct from the term ``health plan'' as used in
other provisions of title I of ACA. The term ``health plan'' does
not include self-insured group health plans.
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Section 2702 of the PHS Act, as added by the ACA, establishes
requirements for guaranteed availability of coverage in the group and
individual markets.\12\
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\12\ Before enactment of the ACA, HIPAA amended the PHS Act
(formerly section 2711) to generally require guaranteed availability
of coverage for employers in the small group market.
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Section 1301(a)(1)(B) of the ACA directs all issuers of QHPs to
cover the EHB package described in section 1302(a) of the ACA,
including coverage of the services described in section 1302(b) of the
ACA, adherence to the cost-sharing limits described in section 1302(c)
of the ACA, and meeting the actuarial value (AV) levels established in
section 1302(d) of the ACA. Section 2707(a) of the PHS Act, which is
effective for plan or policy years beginning on or after January 1,
2014, extends the requirement to cover the EHB package to non-
grandfathered individual and small group health insurance coverage,
irrespective of whether such coverage is offered through an Exchange.
In addition, section 2707(b) of the PHS Act directs non-grandfathered
group health plans to ensure that cost sharing under the plan does not
exceed the limitations described in sections 1302(c)(1) of the ACA.
Section 1302 of the ACA provides for the establishment of an EHB
package that includes coverage of EHBs (as defined by the Secretary),
cost-sharing limits, and AV requirements. Section 1302(b) of the ACA
directs that EHBs be equal in scope to the benefits provided under a
typical employer plan, and that they cover at least the following 10
general categories: Ambulatory patient services; emergency services;
hospitalization; maternity and newborn care; mental health and
substance use disorder services, including behavioral health treatment;
prescription drugs; rehabilitative and habilitative services and
devices; laboratory services; preventive and wellness services and
chronic disease management; and pediatric services, including oral and
vision care.
Section 1302(d) of the ACA describes the various levels of coverage
based on their AV. Consistent with section 1302(d)(2)(A) of the ACA, AV
is calculated based on the provision of EHB to a standard population.
Section 1302(d)(3) of the ACA directs the Secretary to develop
guidelines that allow for de minimis variation in AV calculations.
[[Page 35159]]
Section 1303 of the ACA, as implemented in 45 CFR 156.280,
specifies standards for issuers of QHPs through the Exchanges that
cover abortion services for which federal funding is prohibited. The
statute and regulation establish that, unless otherwise prohibited by
state law, a QHP issuer may elect to cover such abortion services. If
an issuer elects to cover such services under a QHP sold through an
individual market Exchange, the issuer must take certain steps to
ensure that no PTC or CSR funds are used to pay for abortion services
for which public funding is prohibited.
As specified in section 1303(b)(2) of the ACA, one such step is
that individual market Exchange issuers must determine the amount of,
and collect, from each enrollee, a separate payment for an amount equal
to the actuarial value of the coverage for abortions for which public
funding is prohibited, which must be no less than $1 per enrollee, per
month. QHP issuers must also segregate funds for abortion services for
which federal funds are prohibited collected through this payment into
a separate allocation account used to pay for such abortion services.
Sections 1311(b) and 1321(b) of the ACA provide that each state has
the opportunity to establish an individual market Exchange that
facilitates the purchase of insurance coverage by qualified individuals
through QHPs and meets other standards specified in the ACA. Section
1321(c)(1) of the ACA directs the Secretary to establish and operate
such Exchange within states that do not elect to establish an Exchange
or, as determined by the Secretary on or before January 1, 2013, will
not have an Exchange operable by January 1, 2014.
Section 1311(c)(1) of the ACA provides the Secretary the authority
to issue regulations to establish criteria for the certification of
QHPs, including network adequacy standards at section 1311(c)(1)(B) of
the ACA. Section 1311(d) of the ACA describes the minimum functions of
an Exchange. Section 1311(e)(1) of the ACA grants the Exchange the
authority to certify a health plan as a QHP if the health plan meets
the Secretary's requirements for certification issued under section
1311(c)(1) of the ACA, and the Exchange determines that making the plan
available through the Exchange is in the interests of qualified
individuals and qualified employers in the state. Section 1311(c)(6) of
the ACA establishes authority for the Secretary to require Exchanges to
provide enrollment periods, including special enrollment periods,
including the monthly enrollment period for Indians, as defined by
section 4 of the Indian Healthcare Improvement Act, per section
1311(c)(6)(D) of the ACA.\13\
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\13\ The Indian Healthcare Improvement Act (IHCIA), the
cornerstone legal authority for the provision of health care to
American Indians and Alaska Natives, was made permanent when
President Obama signed the bill on March 23, 2010, as part of the
ACA.
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Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange
to establish a Navigator program under which it awards grants to
entities to carry out certain Navigator duties.
Section 1312(c) of the ACA generally requires a health insurance
issuer to consider all enrollees in all health plans (except
grandfathered health plans) offered by such issuer to be members of a
single risk pool for each of its individual and small group markets.
States have the option to merge the individual and small group market
risk pools under section 1312(c)(3) of the ACA.
Section 1312(e) of the ACA directs the Secretary to establish
procedures under which a state may permit agents and brokers to enroll
qualified individuals and qualified employers in QHPs through an
Exchange and to assist individuals in applying for financial assistance
for QHPs sold through an Exchange.
Sections 1313 and 1321 of the ACA provide the Secretary with the
authority to oversee the financial integrity of State Exchanges, their
compliance with HHS standards, and the efficient and non-discriminatory
administration of State Exchange activities. Section 1321 of the ACA
provides for state flexibility in the operation and enforcement of
Exchanges and related requirements.
Section 1321(a)(1) of the ACA directs the Secretary to issue
regulations that set standards for meeting the requirements of title I
of the ACA for, among other things, the establishment and operation of
Exchanges. When operating an FFE under section 1321(c)(1) of the ACA,
HHS has the authority under sections 1321(c)(1) and 1311(d)(5)(A) of
the ACA to collect and spend user fees. Office of Management and Budget
(OMB) Circular A-25 establishes federal policy regarding user fees and
specifies that a user charge will be assessed against each identifiable
recipient for special benefits derived from federal activities beyond
those received by the general public.
Section 1321(d) of the ACA provides that nothing in title I of the
ACA must be construed to preempt any state law that does not prevent
the application of title I of the ACA. Section 1311(k) of the ACA
specifies that Exchanges may not establish rules that conflict with or
prevent the application of regulations issued by the Secretary.
Section 1332 of the ACA provides the Secretary of HHS and the
Secretary of the Treasury (collectively, the Secretaries) with the
discretion to approve a state's proposal to waive specific provisions
of the ACA, provided the state's section 1332 waiver plan meets certain
requirements. Section 1332(a)(4)(B) of the ACA requires the Secretaries
to issue regulations regarding procedures for section 1332 waivers.
Section 1402 of the ACA provides for, among other things,
reductions in cost sharing for EHB for qualified low- and moderate-
income enrollees in silver level QHPs offered through the individual
market Exchanges. This section also provides for reductions in cost
sharing for American Indians enrolled in QHPs at any metal level.
Section 1411(c) of the ACA requires the Secretary to submit certain
information provided by applicants under section 1411(b) of the ACA to
other federal officials for verification, including income and family
size information to the Secretary of the Treasury.
Section 1411(d) of the ACA provides that the Secretary must verify
the accuracy of information provided by applicants under section
1411(b) of the ACA for which section 1411(c) of the ACA does not
prescribe a specific verification procedure, in such manner as the
Secretary determines appropriate.
Section 1411(f) of the ACA requires the Secretary, in consultation
with the Secretary of the Treasury, the Secretary of Homeland Security,
and the Commissioner of Social Security, to establish procedures for
hearing and making decisions governing appeals of Exchange eligibility
determinations.
Section 1411(f)(1)(B) of the ACA requires the Secretary to
establish procedures to redetermine eligibility on a periodic basis, in
appropriate circumstances, including eligibility to purchase a QHP
through the Exchange and for APTC and CSRs.
Section 1411(g) of the ACA allows the use or disclosure of
applicant information only for the limited purposes of, and to the
extent necessary to, ensure the efficient operation of the Exchange,
including by verifying eligibility to enroll through the Exchange and
for APTC and CSRs.
Section 5000A of the Internal Revenue Code (``the Code''), as added
by section 1501(b) of the ACA, requires individuals to have minimum
essential coverage (MEC) for each month, qualify
[[Page 35160]]
for an exemption, or make an individual shared responsibility payment.
Under the Tax Cuts and Jobs Act (Pub. L. 115-97, December 22, 2017) the
individual shared responsibility payment has been reduced to $0,
effective for months beginning after December 31, 2018. Notwithstanding
that reduction, certain exemptions are still relevant to determine
whether individuals age 30 and above qualify to enroll in catastrophic
coverage under 45 CFR 155.305(h) or 156.155.
1. Program Integrity
In the June 19, 2013 Federal Register (78 FR 37031), we published a
proposed rule that proposed certain program integrity standards related
to Exchanges and the premium stabilization programs (proposed Program
Integrity Rule). The provisions of that proposed rule were finalized in
two rules, the ``first Program Integrity Rule'' published in the August
30, 2013 Federal Register (78 FR 54069) and the ``second Program
Integrity Rule'' published in the October 30, 2013 Federal Register (78
FR 65045). In the December 27, 2019 Federal Register (84 FR 71674), we
published a final rule that revised standards relating to oversight of
Exchanges established by states and periodic data matching frequency.
It also added new requirements for certain issuers related to the
separate billing and collection of the separate payment for the premium
portion attributable to coverage for certain abortion services. In the
May 8, 2020 Federal Register (85 FR 27550), we published the Medicare
and Medicaid Programs, Basic Health Programs and Exchanges interim
final rule with public comment (``May 2020 IFC'') and postponed the
implementation deadline for those separate billing and collection
requirements by 60 days.
2. Market Rules
An interim final rule relating to the HIPAA health insurance
reforms was published in the April 8, 1997 Federal Register (62 FR
16894). A proposed rule relating to ACA health insurance market reforms
that became effective in 2014 was published in the November 26, 2012
Federal Register (77 FR 70584). A final rule implementing those
provisions was published in the February 27, 2013 Federal Register (78
FR 13406) (2014 Market Rules).
A proposed rule relating to Exchanges and Insurance Market
Standards for 2015 and beyond was published in the March 21, 2014
Federal Register (79 FR 15808) (2015 Market Standards Proposed Rule). A
final rule implementing the Exchange and Insurance Market Standards for
2015 and Beyond was published in the May 27, 2014 Federal Register (79
FR 30240) (2015 Market Standards Rule). The 2018 Payment Notice final
rule in the December 22, 2016 Federal Register (81 FR 94058) provided
additional guidance on guaranteed availability and guaranteed
renewability. In the Market Stabilization final rule that was published
in the April 18, 2017 Federal Register (82 FR 18346), we released
further guidance related to guaranteed availability. In the 2019
Payment Notice final rule in the April 17, 2018 Federal Register (83 FR
17058), we clarified that certain exceptions to the special enrollment
periods only apply with respect to coverage offered outside of the
Exchange in the individual market.
In part 2 of the 2022 Payment Notice final rule in the May 5, 2021
Federal Register (86 FR 24140), we made additional amendments to the
guaranteed availability regulation regarding special enrollment periods
and finalized new special enrollment periods related to untimely notice
of triggering events, cessation of employer contributions or government
subsidies to COBRA continuation coverage, and loss of APTC eligibility.
3. Exchanges
We published a request for comment relating to Exchanges in the
August 3, 2010 Federal Register (75 FR 45584). We issued initial
guidance to states on Exchanges on November 18, 2010. In the July 15,
2011 Federal Register (76 FR 41865), we published a proposed rule with
proposals to implement components of the Exchanges, and a rule in the
August 17, 2011 Federal Register (76 FR 51201) regarding Exchange
functions in the individual market and Small Business Health Options
Program (SHOP), eligibility determinations, and Exchange standards for
employers. A final rule implementing components of the Exchanges and
setting forth standards for eligibility for Exchanges, including
minimum network adequacy requirements, was published in the March 27,
2012 Federal Register (77 FR 18309) (Exchange Establishment Rule).
In the 2014 Payment Notice and in the Amendments to the HHS Notice
of Benefit and Payment Parameters for 2014 interim final rule,
published in the March 11, 2013 Federal Register (78 FR 15541), we set
forth standards related to Exchange user fees. We established an
adjustment to the FFE user fee in the Coverage of Certain Preventive
Services under the Affordable Care Act final rule, published in the
July 2, 2013 Federal Register (78 FR 39869) (Preventive Services Rule).
In the 2016 Payment Notice in the February 27, 2015 Federal Register
(80 FR 10750), we finalized changes related to network adequacy and
provider directories.
In the 2017 Payment Notice in the March 8, 2016 Federal Register
(81 FR 12204), we finalized six standardized plan options to simplify
the plan selection process for consumers on the Exchanges. In the 2017
Payment Notice, we also finalized policies relating to network adequacy
for QHPs on the FFEs. In the May 11, 2016 Federal Register (81 FR
29146), we published an interim final rule with amendments to the
parameters of certain special enrollment periods (2016 Interim Final
Rule). We finalized these in the 2018 Payment Notice final rule,
published in the December 22, 2016 Federal Register (81 FR 94058). The
2018 Payment Notice also modified the standardized options finalized in
the 2017 Payment Notice and included three new sets of standardized
options. In the March 8, 2016 Federal Register (81 FR 12203), the final
2017 Payment Notice codified State-based Exchanges on the Federal
platform (SBE-FPs) along with relevant requirements.
In the April 18, 2017 Market Stabilization final rule Federal
Register (82 FR 18346), we amended standards relating to special
enrollment periods and QHP certification. In the 2019 Payment Notice
final rule, published in the April 17, 2018 Federal Register (83 FR
16930), we modified parameters around certain special enrollment
periods and discontinued the designation of standardized options. In
the April 25, 2019 Federal Register (84 FR 17454), the final 2020
Payment Notice established a new special enrollment period. In the May
14, 2020 Federal Register (85 FR 29204), the 2021 Payment Notice final
rule made certain changes to plan category limitations and special
enrollment period coverage effective date rules, allowed individuals
provided a non-calendar year qualified small employer health
reimbursement arrangement (QSEHRA) to qualify for an existing special
enrollment period, and discussed plans for future rulemaking for
employer-sponsored coverage verification and non-enforcement discretion
for Exchanges that do not conduct random sampling until plan year 2021.
In part 1 of the 2022 Payment Notice final rule, published in the
January 19, 2021 Federal Register (85 FR 6138), we finalized a new
Exchange Direct Enrollment (DE) option. In part 2 of the 2022 Payment
Notice final rule in the May 5, 2021 Federal Register (86 FR 24140) we
finalized new special
[[Page 35161]]
enrollment periods related to untimely notice of triggering events,
cessation of employer contributions or government subsidies to COBRA
continuation coverage, loss of APTC eligibility, and clarified the
regulation imposing network adequacy standards with regard to QHPs that
do not use provider networks.
4. Essential Health Benefits
On December 16, 2011, HHS released a bulletin \14\ that outlined an
intended regulatory approach for defining EHB, including a benchmark-
based framework. A proposed rule relating to EHBs was published in the
November 26, 2012 Federal Register (77 FR 70643). We established
requirements relating to EHBs in the Standards Related to Essential
Health Benefits, Actuarial Value, and Accreditation Final Rule, which
was published in the February 25, 2013 Federal Register (78 FR 12833)
(EHB Rule). In the 2019 Payment Notice, published in the April 17, 2018
Federal Register (83 FR 16930), we added Sec. 156.111 to provide
states with additional options from which to select an EHB-benchmark
plan for plan years 2020 and beyond.
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\14\ ``Essential Health Benefits Bulletin,'' December 16, 2011.
Available at <a href="https://www.cms.gov/CCIIO/Resources/Files/Downloads/essential_health_benefits_bulletin.pdf">https://www.cms.gov/CCIIO/Resources/Files/Downloads/essential_health_benefits_bulletin.pdf</a>.
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5. Section 1332 Waivers
In the March 14, 2011 Federal Register (76 FR 13553), the
Departments published the ``Application, Review, and Reporting Process
for Waivers for State Innovation'' proposed rule \15\ to implement
section 1332(a)(4)(B) of the ACA. In the February 27, 2012 Federal
Register (77 FR 11700), the Departments published the ``Application,
Review, and Reporting Process for Waivers for State Innovation'' final
rule \16\ (hereinafter referred to as the ``2012 Final Rule''). In the
October 24, 2018 Federal Register (83 FR 53575), the Departments issued
the 2018 Guidance, which superseded the previous guidance \17\
published in the December 16, 2015 Federal Register (80 FR 78131)
(hereinafter referred to as the ``2015 Guidance''), and provided
additional information about the requirements that states must meet for
waiver proposals, the Secretaries' application review procedures, pass-
through funding determinations, certain analytical requirements, and
operational considerations. In the November 6, 2020 Federal Register
(85 FR 71142), the Departments issued an interim final rule \18\
(hereinafter referred to as the ``November 2020 IFC''), which revises
regulations to set forth flexibilities in the public notice
requirements and post award public participation requirements for
waivers under section 1332 during the COVID-19 PHE. In the December 4,
2020 Federal Register (85 FR 78572), the Departments published the
``Patient Protection and Affordable Care Act; HHS Notice of Benefit and
Payment Parameters for 2022 and Pharmacy Benefit Manager Standards;
Updates to State Innovation Waiver (Section 1332 Waiver) Implementing
Regulations'' proposed rule \19\ (hereinafter referred to as the ``2022
Payment Notice proposed rule'') to codify certain policies and
interpretations of the 2018 Guidance. In the January 19, 2021 Federal
Register (86 FR 6138), the Departments published the ``Patient
Protection and Affordable Care Act; HHS Notice of Benefit and Payment
Parameters for 2022; Updates to State Innovation Waiver (Section 1332
Waiver) Implementing Regulations'' final rule \20\ (hereinafter
referred to as the ``part 1 of the 2022 Payment Notice final rule'')
which codified many of the policies and interpretations outlined in the
2018 Guidance into section 1332 regulations.
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\15\ <a href="https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf">https://www.govinfo.gov/content/pkg/FR-2011-03-14/pdf/2011-5583.pdf</a>.
\16\ <a href="https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf">https://www.govinfo.gov/content/pkg/FR-2012-02-27/pdf/2012-4395.pdf</a>.
\17\ <a href="https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf">https://www.govinfo.gov/content/pkg/FR-2015-12-16/pdf/2015-31563.pdf</a>.
\18\ <a href="https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency">https://www.federalregister.gov/documents/2020/11/06/2020-24332/additional-policy-and-regulatory-revisions-in-response-to-the-covid-19-public-health-emergency</a>.
\19\ <a href="https://www.federalregister.gov/documents/2020/12/04/2020-26534/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022-and">https://www.federalregister.gov/documents/2020/12/04/2020-26534/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022-and</a>.
\20\ <a href="https://www.federalregister.gov/documents/2021/01/19/2021-01175/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022">https://www.federalregister.gov/documents/2021/01/19/2021-01175/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2022</a>.
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B. Stakeholder Consultation and Input
HHS has consulted with stakeholders on policies related to the
operation of Exchanges. We have held a number of listening sessions
with consumers, providers, employers, health plans, advocacy groups and
the actuarial community to gather public input. We have solicited input
from state representatives on numerous topics, particularly the direct
enrollment option for FFEs, SBE-FPs and State Exchanges.
We consulted with stakeholders through monthly meetings with the
National Association of Insurance Commissioners (NAIC), regular contact
with states, and health insurance issuers, trade groups, consumer
advocates, employers, and other interested parties. We considered all
public input we received as we developed the policies in this proposed
rule.
C. Structure of Proposed Rule
The regulations outlined in this proposed rule would be codified in
45 CFR parts 147, 155, and 156. In addition, the regulations outlined
in this proposed rule governing waivers under section 1332 of the ACA
at 45 CFR part 155 subpart N would also be codified in 31 CFR part 33.
The proposed changes to part 147 would specify that issuers are not
required to provide a special enrollment period in the individual
market with respect to coverage offered outside of an Exchange to
consumers who would be eligible for the proposed special enrollment
period at Sec. 155.420(d)(16).
The proposed changes to part 155 would repeal the establishment of
the Exchange DE option, which permitted State Exchanges, SBE-FPs, and
FFEs to use direct enrollment technology and non-Exchange websites
developed by approved web brokers, issuers and other direct enrollment
partners to enroll qualified individuals in QHPs offered through the
Exchange. We propose extending FFE open enrollment to end on January 15
of the applicable year, rather than December 15 of the previous year
beginning with the 2022 coverage year and beyond. We also propose to
reinstitute previous requirements that Navigators in FFEs be required
to provide consumers with information and assistance on certain post-
enrollment topics, such as the Exchange eligibility appeals process,
the Exchange-related components of the PTC reconciliation process, and
the basic concepts and rights of health coverage and how to use it. We
further propose to provide a monthly special enrollment period for
qualified individuals or enrollees, or the dependents of a qualified
individual or enrollee, who are eligible for APTC, and whose household
income does not exceed 150 percent of the FPL. Finally, we propose to
clarify that, for purposes of the special enrollment periods provided
at Sec. 155.420(d), a qualified individual or enrollee who qualifies
for APTC, or a dependent whose tax filer can qualify for APTC on their
behalf, because they meet the criteria at Sec. 155.305(f), but who
qualifies for a maximum APTC amount of zero dollars, is not considered
APTC eligible for purposes of these special enrollment periods.
The proposed changes to part 156 would update the user fee rates
for the 2022 benefit year for all issuers participating on the
Exchanges using the Federal platform. We also propose to
[[Page 35162]]
repeal the separate billing requirement, which requires individual
market QHP issuers that offer coverage for abortion services for which
federal funding is prohibited to separately bill policy holders for the
portion of the premium attributable to coverage of such abortion
services and instruct the policy holder to pay for this portion of
their premium in a separate transaction. Finally, we propose to update
a cross reference to mental health parity standards in the provision of
EHB regulations.
The proposed changes in 31 CFR part 33 and 45 CFR part 155 related
to section 1332 waivers would rescind the previous incorporation of
certain policies and interpretations announced in the 2018 Guidance
into regulation. The proposals related to section 1332 waivers include
proposed processes and procedures for amendments and extensions for
approved waiver plans. Additionally, the Departments propose to extend
certain flexibilities in the public notice requirements and post award
public participation requirements for section 1332 waivers during
future emergent situations.
III. Provisions of the Updating Payment Parameters and Improving Health
Insurance Markets for 2022 and Beyond Proposed Rule
A. Part 147--Health Insurance Reform Requirements for the Group and
Individual Health Insurance Markets
1. Guaranteed Availability of Coverage (Sec. 147.104)
a. Past-Due Premiums
On January 28, 2021, President Biden issued E.O. 14009,
``Strengthening Medicaid and the Affordable Care Act,'' \21\ directing
HHS, and the heads of all other executive departments and agencies with
authorities and responsibilities related to the ACA, to review all
existing regulations, orders, guidance documents, policies, and any
other similar agency actions to determine whether such agency actions
are inconsistent with this Administration's policy to protect and
strengthen the ACA and to make high-quality health care accessible and
affordable for every American.
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\21\ 86 FR 7793 (February 2, 2021).
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In the preamble to the Market Stabilization final rule,\22\ we
stated that, to the extent permitted by applicable state law, an issuer
will not violate the guaranteed availability requirements in Sec.
147.104 where the issuer attributes a premium payment made for new
coverage to any past-due premiums owed for coverage from the same
issuer or another issuer in the same controlled group within the prior
12-month period before effectuating enrollment in the new coverage.
This policy addressed concerns regarding the potential for individuals
to take unfair advantage of the guaranteed availability rules. For
example, an individual could decline to make premium payments at the
end of a benefit year, but still receive periods of unpaid coverage
during a grace period before coverage is terminated. We were concerned
that despite such failures to pay, such individuals would be able to
immediately sign up for new coverage for the next benefit year during
the individual market open enrollment period, without making
restitution for the periods of unpaid coverage.
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\22\ 82 FR 18346, 18349 (April 18, 2017).
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HHS currently is reviewing this policy to analyze whether it may
present unnecessary barriers to accessing health coverage. In
compliance with E.O. 14009, we intend to address this interpretation of
guaranteed availability in the 2023 Payment Notice rulemaking.
b. Special Enrollment Periods (Sec. 147.104(b)(2))
As further discussed in the preamble section regarding the proposed
monthly special enrollment period for APTC-eligible qualified
individuals with an expected household income no greater than 150
percent of the FPL (Sec. 155.420(d)(16)), we propose to add a new
paragraph at Sec. 147.104(b)(2)(i)(G) to specify that issuers are not
required to provide this special enrollment period in the individual
market with respect to coverage offered outside of an Exchange. We
propose to add this paragraph because eligibility for the special
enrollment period is based on eligibility for APTC, as discussed in the
Sec. 155.420(d)(16) preamble section, and APTC cannot be applied to
coverage offered outside of an Exchange. We request comment on this
proposal.
B. Part 155--Exchange Establishment Standards and Other Related
Standards Under the Affordable Care Act
1. Standardized Options (Sec. 155.20)
On March 4, 2021, the United States District Court for the District
of Maryland decided City of Columbus v. Cochran, No. 18-2364, 2021 WL
825973 (D. Md. Mar. 4, 2021). The court reviewed nine separate policies
we had promulgated in the 2019 Payment Notice final rule. The court
vacated four of these policies. One of the policies the court vacated
was the 2019 Payment Notice's cessation of the practice of designating
some plans in the FFEs as ``standardized options.'' \23\
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\23\ See 83 FR 16974-16975.
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We intend to implement the court's decision as soon as possible, as
explained in part 2 of the 2022 Payment Notice final rule.\24\ We will
not be able to fully implement those aspects of the court's decision
regarding standardized options in time for issuers to design plans and
for CMS to be prepared to certify such plans as QHPs for the 2022 plan
year. With the rule removing standardized options vacated, we will also
need to design and propose new standardized options that otherwise meet
current market reform requirements and alter the Federal Exchange
eligibility and enrollment platform system build (<a href="http://HealthCare.gov">HealthCare.gov</a>) to
provide differential display of such plans. Web-brokers that are direct
enrollment partners in FFE and SBE-FP states will also need time to
adjust their respective systems to provide differential display of such
plans on their non-Exchange websites.\25\ We will need to design,
propose, and finalize such plans in time for issuers to design their
own standardized options in accord with HHS's parameters and to submit
those plans for approval by applicable regulatory authorities and for
certification as QHPs. This is not feasible for the upcoming QHP
certification cycle for the 2022 plan year. The plan certification
process for that year has already begun as of April 22, 2021. CMS'
planning for the QHP certification cycle for the 2022 plan year has
taken into account the existing policies that the court vacated, and it
is too late now to revisit those factors if the process is to go
forward in time for plans to be certified by open enrollment later this
year.
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\24\ See 86 FR 24140, 24264-24265.
\25\ See 45 CFR 155.220(c)(3)(i)(H).
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Specifically, in the last iteration of standardized options we
finalized in the 2018 Payment Notice, we created three sets of
standardized options based on FFE and SBE-FP enrollment data and state
cost-sharing laws. The basis on which we created these three sets of
options as well as a number of other factors in the individual market
(for example, states with FFEs or SBE-FPs transitioning to SBEs) have
changed considerably since the last iteration of standardized options
in 2018. Further, we do not have sufficient time to conduct a full
analysis of the changes that have occurred in the last several years
necessary to timely design and propose adequate standardized options
suitable for the current environment. Additionally, in prior years, we
[[Page 35163]]
proposed and finalized standardized option plan designs prior to the
start of the QHP certification cycle for the following plan year such
that issuers had sufficient time to assess these standardized options
and could thus determine if they wanted to offer them and take the
steps necessary to do so. Issuers will not have a sufficient amount of
time to meaningfully assess any standardized options we would propose
and decide whether or not to offer them if such proposals were made
effective before the 2023 plan year.
For these reasons, we intend to resume the designation of
standardized options and propose specific plan designs in more complete
detail in the 2023 Payment Notice. As such, we seek the views of
stakeholders regarding issues related to the proposal of new
standardized options, including specifically the views of states with
FFEs or SBE-FPs regarding how unique state cost-sharing laws could
affect standardized option plan designs to assist in our development of
such proposals.
2. Navigator Program Standards (Sec. 155.210)
We propose to amend Sec. 155.210(e)(9) to reinstitute the
requirement that Navigators in the FFEs provide information and
assistance with regard to certain post-enrollment topics.
Sections 1311(d)(4)(K) and 1311(i) of the ACA require each Exchange
to establish a Navigator program under which it awards grants to
entities to conduct public education activities to raise awareness of
the availability of QHPs; distribute fair and impartial information
concerning enrollment in QHPs, and the availability of PTCs and CSRs;
facilitate enrollment in QHPs; provide referrals to any applicable
office of health insurance consumer assistance or health insurance
ombudsman established under section 2793 of the PHS Act, or any other
appropriate state agency or agencies for any enrollee with a grievance,
complaint, or question regarding their health plan, coverage, or a
determination under such plan or coverage; and provide information in a
manner that is culturally and linguistically appropriate to the needs
of the population being served by the Exchange. The statute also
requires the Secretary, in collaboration with states, to develop
standards to ensure that information made available by Navigators is
fair, accurate, and impartial. We have implemented the statutorily
required Navigator duties through regulations at Sec. Sec. 155.210
(for all Exchanges) and 155.215 (for Navigators in FFEs).
Further, section 1311(i)(4) of the ACA requires the Secretary to
establish standards for Navigators to ensure that Navigators are
qualified, and licensed, if appropriate, to engage in the Navigator
activities described in the statute and to avoid conflicts of interest.
This provision has been implemented at Sec. Sec. 155.210(b) (generally
for all Exchanges) and 155.215(b) (for Navigators in FFEs).
We have also established under Sec. 155.205(d) and (e) that each
Exchange must have a consumer assistance function, including the
Navigator program, and must conduct outreach and education activities
to educate consumers about the Exchange and insurance affordability
programs to encourage participation.
We propose to amend Sec. 155.210(e)(9) to reinstitute the
requirement that Navigators in the FFEs provide information and
assistance with regard to certain post-enrollment topics rather than
merely being authorized to do so.
Following a reduction in overall funding available to the FFE
Navigator program in 2020, we provided more flexibility to FFE
Navigators by making the provision of certain types of assistance,
including post-enrollment assistance, permissible, but not required,
for FFE Navigators under Navigator grants awarded in 2019 or any later
year.\26\ On June 4, 2021, CMS issued the 2021 Navigator Notice of
Funding Opportunity (NOFO), which will make $80 million in grant
funding available to Navigators in states with an FFE for the 2022 plan
year.\27\ With funding for the FFE Navigator program increasing
substantially for the 2022 plan year, we believe that there will be
sufficient Navigator grant funding available to support the post-
enrollment duties we propose to once again require of FFE Navigators.
We also believe that this proposal aligns with E.O. 14009 on
Strengthening Medicaid and the ACA because it will improve consumers'
access to health coverage information, not only when selecting a plan,
but also throughout the year as they use their coverage.\28\ In
addition, this proposal is designed to ensure that consumers would have
access to skilled assistance beyond applying for and enrolling in
health insurance coverage through the Exchange, including, for example,
assistance with the process of filing Exchange eligibility appeals,
understanding basic information about PTC reconciliation, and
understanding basic concepts and rights related to health coverage and
how to use it, such as locating providers and accessing care.
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\26\ 84 FR 17511-17514 (April 25, 2019). These post-enrollment
topics included: Understanding the process of filing Exchange
eligibility appeals; understanding and applying for exemptions from
the individual shared responsibility payment that are granted
through the Exchange; understanding the availability of exemptions
from the requirement to maintain MEC and from the individual shared
responsibility payment that are claimed through the tax filing
process and how to claim them; the Exchange-related components of
the premium tax credit reconciliation process; understanding basic
concepts and rights related to health coverage and how to use it;
and referrals to licensed tax advisers, tax preparers, or other
resources for assistance with tax preparation and tax advice on
certain Exchange-related topics.
\27\ <a href="https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0">https://www.cms.gov/newsroom/press-releases/cms-announces-80-million-funding-opportunity-available-navigators-states-federally-facilitated-0</a>.
\28\ 86 FR 7793 (Feb. 2, 2021).
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Section 1311(i)(3)(D) of the ACA and 45 CFR 155.210(e)(4) already
expressly require Navigators to provide post-enrollment assistance by
referring consumers with complaints, questions, or grievances about
their coverage to appropriate state agencies. This suggests that
Congress anticipated that consumers would need assistance beyond the
application and enrollment process, and that Navigators would maintain
relationships with consumers and be a source of such post-enrollment
assistance.
Consistent with the requirements under section 1311(i)(3)(B) and
(C) of the ACA that Navigators distribute fair and impartial
information concerning enrollment in QHPs and facilitate enrollment in
QHPs, and pursuant to the Secretary's authority under section
1321(a)(1)(A) of the ACA, we propose to reinstitute as a requirement at
Sec. 155.210(e)(9)(i) that Navigators in the FFEs must help consumers
with understanding the process of filing appeals of Exchange
eligibility determinations. We are once again not proposing to
establish a duty for Navigators to represent a consumer in an appeal,
sign an appeal request, or file an appeal on the consumer's behalf. We
believe that helping consumers understand Exchange appeal rights when
they have received an adverse eligibility determination when applying
for health insurance coverage, and assisting them with the process of
completing and submitting appeal forms, would help to facilitate
enrollment through the FFEs and would help consumers obtain fair and
impartial information about enrollment through the FFEs. We would
interpret this proposal to include helping consumers file appeals of
eligibility determinations made by an Exchange related to enrollment in
a QHP, special enrollment periods, and any insurance affordability
program, including eligibility determinations for Exchange
[[Page 35164]]
financial assistance, Medicaid, the Children's Health Insurance Program
(CHIP), and the Basic Health Program.
Currently, pursuant to Sec. 155.210(e)(9)(ii), Navigators in the
FFEs are permitted to provide information and assistance to consumers
with regard to understanding and applying for exemptions from the
individual shared responsibility payment that are granted through the
Exchange, understanding the availability of exemptions from the
requirement to maintain minimum essential coverage and from the
individual shared responsibility payment that are claimed through the
tax filing process and how to claim them, and understanding the
availability of the Internal Revenue Service (IRS) resources on this
topic. We propose to amend Sec. 155.210(e)(9)(ii) slightly to
reinstitute as a requirement that Navigators in the FFEs must help
consumers understand and apply for exemptions from the requirement to
maintain minimum essential coverage granted by the Exchange. Although
consumers who do not maintain minimum essential coverage no longer need
to receive an exemption from the individual shared responsibility
payment to avoid having to make such a payment, Navigators can still
assist consumers age 30 or above with filing an exemption to qualify to
enroll in catastrophic coverage under Sec. 155.305(h). We believe that
this proposal is consistent with Navigators' duty under section
1311(i)(3)(B) and (C) of the ACA to distribute fair and impartial
information concerning enrollment in QHPs, since impartial information
concerning the availability of exemptions for consumers age 30 or above
to enroll in catastrophic coverage would help consumers make informed
decisions about whether or not to enroll in such coverage. This
assistance with Exchange-granted exemptions from the requirement to
maintain minimum essential coverage would include informing consumers
about the availability of the exemption; helping consumers fill out and
submit Exchange-granted exemption applications and obtain any necessary
forms prior to or after applying for the exemption; explaining what the
exemption certificate number is and how to use it; and helping
consumers understand and use the Exchange tool to find catastrophic
plans in their area.
In addition, we propose to reinstitute as a requirement at Sec.
155.210(e)(9)(iii) that Navigators must help consumers with the
Exchange-related components of the PTC reconciliation process and with
understanding the availability of IRS resources on this process. This
would include ensuring consumers have access to their Forms 1095-A and
receive general, high-level information about the purpose of this form
that is consistent with published IRS guidance on the topic. This
proposal stems from the requirement under section 1311(i)(3)(B) of the
ACA that Navigators distribute fair and impartial information
concerning the availability of the PTC under section 36B of the Code.
Consumers who receive premium assistance through APTC may need help
with a variety of issues related to the requirement to reconcile the
APTC with the PTC allowed for the year of coverage. FFE Navigators
would be required to help consumers obtain IRS Forms 1095-A and 8962,
and the instructions for both, and to provide general information,
consistent with applicable IRS guidance, about the significance of the
forms. Navigators would also be required to help consumers understand
(1) how to report errors on the Form 1095-A; (2) how to find silver
plan premiums using the Exchange tool; and (3) the difference between
APTC and PTC and the potential implications for enrollment and
reenrollment of not filing a tax return and reconciling the APTC paid
on consumers' behalf with their PTC for the year.
Navigators would still not be permitted to provide tax assistance
or advice, or interpret tax rules and forms within their capacity as
FFE Navigators. However, their expertise related to the consumer-facing
aspects of the Exchange, including eligibility and enrollment rules and
procedures, would uniquely qualify them to help consumers understand
and obtain information from the Exchange that is necessary to
understand the PTC reconciliation process. Because this proposal
includes a proposed requirement that Navigators provide consumers with
information and assistance understanding the availability of IRS
resources, Navigators would be expected to familiarize themselves with
the availability of materials on <a href="http://irs.gov">irs.gov</a>, including the Form 8962
instructions, IRS Publication 974 Premium Tax Credit, and relevant
FAQs, and to refer consumers with questions about tax law to those
resources or to other resources, such as free tax return preparation
assistance from the Volunteer Income Tax Assistance or Tax Counseling
for the Elderly programs.
To help ensure consumers have seamless access to Exchange-related
tax information beyond the basic information that Navigators can
provide, we propose to reinstitute as a requirement at Sec.
155.210(e)(9)(v) that FFE Navigators must refer consumers to licensed
tax advisers, tax preparers, or other resources for assistance with tax
preparation and tax advice related to consumer questions about the
Exchange application and enrollment process, and PTC
reconciliations.\29\
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\29\ We note that we are not proposing to reinstitute at Sec.
155.210(e)(9)(v) the requirement that Navigators must provide
referrals to licensed tax advisers, tax preparers, or other
resources for assistance with tax preparation and tax advice related
to consumer questions about exemptions from the requirement to
maintain minimum essential coverage and from the individual shared
responsibility payment in light of the fact that the individual
shared responsibility payment was reduced to zero for months
beginning after December 31, 2018 under the Tax Cuts and Jobs Act
(Pub. L. 115-97, December 22, 2017).
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We interpret the Navigator duties to facilitate enrollment in QHPs
in section 1311(i)(3)(C) of the ACA, to distribute fair and impartial
information concerning enrollment in QHPs under section 1311(i)(3)(B)
of the ACA, and to conduct public education activities to raise
awareness about the availability of QHPs in section 1311(i)(3)(A) of
the ACA to include helping consumers understand the kinds of decisions
they will need to make in selecting coverage, and how to use their
coverage after they are enrolled. We have previously stated that one of
the overall purposes of consumer assistance programs is to help
consumers become fully informed and health literate.\30\
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\30\ See 79 FR 30276.
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To improve consumers' health literacy related to coverage
generally, and to ensure that individual consumers are able to use
their coverage meaningfully, we propose to reinstitute at Sec.
155.210(e)(9)(iv) the requirement that Navigators in the FFEs must help
consumers understand basic concepts and rights related to health
coverage and how to use it. We also propose to expand our
interpretation of this requirement and the activities that fall within
its scope. These activities could be supported through the use of
existing resources such as the CMS ``From Coverage to Care''
initiative, which we encourage Navigators to review, and which are now
available in multiple languages at <a href="https://marketplace.cms.gov/c2c">https://marketplace.cms.gov/c2c</a>.
This proposal would improve consumers' access to health coverage
information, not just when selecting a plan, but also when using their
coverage.
We believe expanding our interpretation of the requirement that
Navigators help consumers understand basic concepts and rights related
to health coverage and how to use it and
[[Page 35165]]
the activities that fall within the scope of this requirement is vital
to improving health equity and helping to address social determinants
of health, particularly among underserved and vulnerable
populations.\31\ Navigators are already required under Sec.
155.210(e)(8) to provide targeted assistance to underserved or
vulnerable populations. Underserved and vulnerable populations often
experience lower levels of health literacy, which can be a barrier to
enrolling in and accessing care.\32\ Social determinants of health can
also create significant disparities in whether and how an individual is
able to afford and access health coverage and health care services,
including primary and preventive care. As trusted partners and members
of local communities, Navigators are uniquely positioned to establish
and build trust with individuals and families as they transition from
enrolling in health coverage to using and maintaining their coverage
throughout the year.
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\31\ 86 FR 7009 (Jan. 25, 2021).
\32\ Access to Health Services: Healthy People 2020. Office of
Disease Prevention and Health Promotion, Department of Health &
Human Services. <a href="https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/access-to-health">https://www.healthypeople.gov/2020/topics-objectives/topic/social-determinants-health/interventions-resources/access-to-health</a>.
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Additionally, Navigators in FFEs are already required under Sec.
155.215(c)(1) to develop and maintain general knowledge about the
racial, ethnic, and cultural groups in their service area, including
each group's health literacy and other needs, and under Sec.
155.215(c)(2) to collect and maintain updated information to help
understand the composition of the communities in the service area.
Because the health literacy needs of consumers will vary depending on
their circumstances, we are not requiring Navigators to help consumers
with specific health literacy topics. Instead, we propose to expand our
interpretation of the Navigator duties proposed to be reinstituted as
requirements at Sec. 155.210(e)(9)(iv) to include, for example,
helping consumers understand (1) key terms used in health coverage
materials, such as ``deductible'' and ``coinsurance,'' and how they
relate to the consumer's health plan; (2) the cost and care differences
between a visit to the emergency department and a visit to a primary
care provider under the coverage options available to the consumer; (3)
how to evaluate their health care options and make cost-conscious
decisions, including through the use of information required to be
disclosed by their health plan as a result of the Transparency in
Coverage Final Rules; \33\ (4) how to identify in-network providers to
make and prepare for an appointment with a provider--including
utilizing tools and resources available through the No Surprises Act
\34\ to make informed decisions about their care; (5) how the
consumer's coverage addresses steps that often are taken after an
appointment with a provider, such as making a follow-up appointment and
filling a prescription; and (6) the right to coverage of certain
preventive health services without cost sharing under QHPs--including
information and resources related to accessing viral testing and
vaccination options supported by Exchange coverage. If this proposal is
finalized, CMS intends to make training materials and other educational
resources available to Navigators regarding the proposed expanded
interpretation of this requirement.
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\33\ 85 FR 72158.
\34\ Title I of Division BB of the Consolidated Appropriations
Act, 2021, Public Law 116-260 (Dec. 27, 2020).
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FFE Navigators will continue to be permitted to perform the
Navigator duties specified in Sec. 155.210(e)(9) until this proposal,
if finalized, becomes effective. If this proposal is finalized, FFE
Navigators would be required to perform the Navigator duties specified
in Sec. 155.210(e)(9) beginning with Navigator grants awarded after
the effective date of this rule, including non-competing continuation
awards. For example, if this proposal is finalized prior to Navigator
grant funding being awarded in fiscal year (FY) 2022, FY 2021 Navigator
grantees will be required to perform these duties beginning with the
Navigator grant funding awarded in FY 2022 for the second 12-month
budget period of the 36-month period of performance. To the extent FFE
Navigators awarded grant funding in FY 2021 are not already performing
these duties under their year one project plans when this proposal, if
finalized, becomes effective, they can revise their project plans to
incorporate performance of the duties specified in Sec. 155.210(e)(9)
as part of their non-competing continuation application for their FY
2022 funding. If this proposal is finalized as proposed, we would
codify in Sec. 155.210(e)(9) the applicability date to make clear when
the Navigator duties specified in Sec. 155.210(e)(9) would once again
be required.
We interpret the requirement to facilitate enrollment in a QHP
under section 1311(i)(3)(C) of the ACA, and the requirement at Sec.
155.210(e)(2) to provide information that assists consumers with
submitting the eligibility application, to include assistance with
updating an application for coverage through an Exchange, including
reporting changes in circumstances and assisting with submitting
information for eligibility redeterminations. Additionally, Navigators
are already permitted, but not required, to help with a variety of
other post-enrollment issues. For example, we interpret the
requirements in Sec. 155.210(e)(1) and (2) that Navigators conduct
public education activities to raise awareness about the Exchange and
provide fair and impartial information about the application and plan
selection process to mean that Navigators may educate consumers about
their rights with respect to coverage available through an Exchange,
such as nondiscrimination protections, prohibitions on preexisting
condition exclusions, and preventive services available without cost-
sharing. We also interpret these requirements, together with the
requirement in section 1311(i)(3)(B) of the ACA that Navigators
distribute fair and impartial information concerning enrollment in
QHPs, and the availability of Exchange financial assistance, to mean
that Navigators may assist consumers with questions about paying
premiums for coverage or insurance affordability programs enrolled in
through an Exchange. Finally, we interpret the requirement in section
1311(i)(3)(D) of the ACA and Sec. 155.210(e)(4) to provide referrals
for certain post-enrollment issues to mean that Navigators may help
consumers obtain assistance with coverage claims denials.
Certified application counselors (CACs) do not receive grants from
the FFEs, and thus may have more limited resources than Navigators. As
a result, while we are not proposing to require CACs to further expand
their required duties, we encourage CACs to help with activities
consistent with their existing regulatory duties and recognize that
many of these CACs may already be participating in these post-
enrollment activities.
We seek comment on all aspects of this proposal.
3. Exchange Direct Enrollment Option (Sec. 155.221(j))
In part 1 of the 2022 Payment Notice final rule, we codified Sec.
155.221(j), which established a process for states to elect a new
Exchange Direct Enrollment option (Exchange DE option). Under the
Exchange DE option, State Exchanges, SBE-FPs, and FFE states may work
directly with private sector entities (including QHP issuers, web-
brokers,
[[Page 35166]]
and agents and brokers) to operate enrollment websites through which
consumers can apply for coverage, receive an eligibility determination
from the Exchange, and purchase an individual market QHP offered
through the Exchange with APTC and CSRs, if otherwise eligible. Subject
to meeting HHS approval requirements under Sec. 155.221(j)(1) and (2),
the Exchange DE option may be implemented in states with a State
Exchange beginning in plan year 2022 and in SBE-FP or FFE states
beginning in plan year 2023. We also finalized a 2023 user fee rate of
1.5 percent of the total monthly premiums charged by issuers for each
policy in FFE and SBE-FP states that elect the Exchange DE option.
Since the publication of part 1 of the 2022 Payment Notice final rule,
there have been significant changes to policy and operational
priorities resulting from recent shifting policy goals, as well as the
enactment of new federal laws. Given these changes, as well as a
general lack of interest expressed by states in the option, and
potential for the Exchange DE option to be misaligned with
administration priorities, we propose to remove Sec. 155.221(j) and
repeal the Exchange DE option.
On January 20, 2021, President Biden issued the Executive Order,
``On Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government'' (E.O. 13985),\35\ directing that as a
policy matter the federal government should pursue a comprehensive
approach to advancing equity for all, including people of color and
others who have been historically underserved, marginalized, and
adversely affected by persistent poverty and inequality. On January 28,
2021, President Biden issued E.O. 14009.\36\ Section 3 of E.O. 14009
directs HHS, and the heads of all other executive departments and
agencies with authorities and responsibilities related to Medicaid and
the ACA, to review all existing regulations, orders, guidance
documents, policies, and any other similar agency actions to determine
whether they are inconsistent with policy priorities described in
Section 1 of E.O. 14009, to include protecting and strengthening the
ACA by assisting people who are potentially eligible for coverage, and
eliminating unnecessary difficulties to obtaining health insurance.
Specifically, this agency review must evaluate whether existing
policies or regulations, ``. . . undermine the Health Insurance
Marketplace[supreg] \37\ or the individual, small group, or large group
markets for health insurance . . .'' or ``. . . present unnecessary
barriers to individuals and families attempting to access Medicaid or
ACA coverage . . .'' \38\
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\35\ 86 FR 7009 (Jan. 25, 2021).
\36\ 86 FR 7793 (Feb. 2, 2021).
\37\ Health Insurance Marketplace[supreg] is a registered
service mark of the U.S. Department of Health & Human Services.
\38\ 86 FR 7793 (Feb. 2, 2021).
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Section 2 of E.O. 14009 also requires that the Secretary of HHS
consider whether to implement an Exchange special enrollment period for
exceptional circumstances pursuant to Sec. 155.420(d)(9) and other
existing authorities, for uninsured and underinsured individuals to
obtain coverage in light of the special circumstances caused by the
COVID-19 pandemic. After E.O. 14009 was issued, HHS used its discretion
to make such a special enrollment period available to uninsured and
underinsured consumers through <a href="http://HealthCare.gov">HealthCare.gov</a> from February 15, 2021,
through May 15, 2021. To support outreach, education and enrollment
efforts for this special enrollment period, HHS has provided $2.3
million in additional funding to current Navigator grantees in the
FFE.\39\
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\39\ <a href="https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period">https://www.cms.gov/newsroom/press-releases/cms-announces-additional-navigator-funding-support-marketplace-special-enrollment-period</a>.
_____________________________________-
All State Exchanges followed suit and implemented corresponding
special enrollment periods on similar timelines. HHS later made a
decision to extend the ability of consumers to access the special
enrollment period through <a href="http://HealthCare.gov">HealthCare.gov</a> through August 15, 2021, and
many State Exchanges extended their special enrollment periods, as
well. As of May 31, 2021, 1.2 million new consumers had selected plans
through <a href="http://HealthCare.gov">HealthCare.gov</a>, which represents a substantial increase from
previous years when special enrollment periods were available primarily
for normal qualifying life events.\40\
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\40\ <a href="https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2">https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-2</a>.
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In addition, Congress recently passed the ARP,\41\ which was signed
into law on March 11, 2021. The ARP establishes new ACA programs,
including a new grant program for Exchange modernization, which
appropriates $20,000,000 in federal funding, which is available until
September 30, 2022, to State Exchanges to implement Exchange system,
program, or technology updates to ensure compliance with applicable
federal requirements. It also modifies eligibility criteria for
existing ACA programs. For example, the provisions in the ARP include a
temporary change (for taxable years 2021 and 2022) that allows
consumers with household income above 400 percent of the FPL to be
applicable taxpayers potentially eligible for PTC, an update to
applicable percentage tables to increase the amount of PTC for
qualified individuals in all income brackets, and a modification of
eligibility for PTC for consumers receiving, or approved to receive,
unemployment compensation in 2021. Beginning on April 1, HHS
operationalized these new requirements through <a href="http://HealthCare.gov">HealthCare.gov</a>, and is
providing technical assistance to State Exchanges that are
operationalizing these requirements at the state level. Approximately
1.9 million consumers have returned to <a href="http://HealthCare.gov">HealthCare.gov</a> to reduce their
monthly premiums after APTC by over 40 percent, from $100 to $57, on
average, while for new consumers selecting plans during the special
enrollment period, the average monthly premium after APTC fell by 25
percent.\42\
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\41\ Public Law 117-2.
\42\ <a href="https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-1">https://www.cms.gov/newsroom/fact-sheets/2021-marketplace-special-enrollment-period-report-1</a>.
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There are also new obligations established via other health care-
related legislation for which HHS is responsible to implement in
coordination with states and other federal Departments. This includes
the No Surprises Act,\43\ which was enacted on December 27, 2020, and
establishes an extensive array of federal and state requirements and
programs to protect consumers against surprise medical bills.
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\43\ Title I of Division BB of the Consolidated Appropriations
Act, 2021, Public Law 116-260 (Dec. 27, 2020).
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Given our obligation to review all existing policies and
regulations in line with E.O. 14009, E.O. 13985, and recent actions by
Congress, including the health care-related provisions of the ARP and
other new federal legislation, for which HHS is now responsible or
centrally involved in implementing, we have determined that all
available resources should be directed to ensuring we are able to
efficiently and effectively meet those obligations. Permitting the
establishment of the Exchange DE option would detract from those
efforts. Furthermore, meeting the new requirements of the health care
provisions of the ARP would add complexity to Exchange operations that
could reduce the prospects for successful implementation of the
Exchange DE option, even if temporarily. For instance, states and DE
entities would need to coordinate and implement new procedures to
ensure that consumers receive eligibility
[[Page 35167]]
determinations and are enrolled in coverage in line with the modified
PTC eligibility criteria under the ARP, and then, that this temporary
modification no longer applies after taxable year 2022. As part of this
process, HHS would need to ensure the adoption of appropriate
procedures, proper approvals, and ongoing oversight. To foreclose the
possibility that federal funding and resources will be diverted from
efforts to provide direct benefits to consumers made available under
recent legislation to optional programs, we are proposing to repeal the
Exchange DE option. This will help ensure that available resources are
allocated consistent with administration health care priorities and
dedicated to implementation of newly-enacted federal laws that provide
greater financial assistance and protections to consumers.
Repealing the Exchange DE option should generally have a minimal
impact on states and other interested parties. States with State
Exchanges already could engage with direct enrollment entities
preceding the addition of Sec. 155.221(j). In addition, the FFE has
already implemented the direct enrollment program (including classic
direct enrollment and enhanced direct enrollment), which provides broad
availability of non-Exchange websites to assist consumers applying for,
or enrolling in QHPs through an FFE or SBE-FP with APTC and CSRs, when
otherwise eligible.\44\ Additionally, nothing in the previous
regulatory framework prohibited State Exchanges from engaging direct
enrollment entities similar to the FFE in order to supplement Exchange
operations in their states should they so choose. In fact, although we
understand that several State Exchanges have engaged with direct
enrollment entities to discuss possibilities for collaboration, State
Exchanges and other stakeholders nearly universally cautioned against
the Exchange DE option in public comments submitted in response to the
proposal. In addition, to date, no state has expressed interest in
implementing the Exchange DE option.
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\44\ The FFE direct enrollment pathways are also available in
SBE-FP states. See 45 CFR 155.220(l) and 155.221(i).
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Finally, in reviewing Sec. 155.221(j) in line with E.O. 13985 and
E.O. 14009, and after further consideration of public comments received
when the Exchange DE option was proposed, we have determined that the
Exchange DE option is inconsistent with policies described in E.O.
13985 and sections 1 and 3 of E.O. 14009. Consistent with many public
comments received when the Exchange DE option was proposed, we believe
that shifting away from <a href="http://HealthCare.gov">HealthCare.gov</a> or State Exchange websites as
the primary pathway to enroll in and receive information about coverage
would harm consumers by unnecessarily fracturing enrollment processes
among the Exchange and possibly multiple direct enrollment entities
operating in a state. Such a shift would be particularly harmful now
when over one million consumers have successfully navigated
<a href="http://HealthCare.gov">HealthCare.gov</a> during the COVID special enrollment period to enroll in
Exchange coverage. We also agree with many commenters who noted that a
fractured process could foster consumer confusion about how to get
covered and what coverage options are available, since consumers could
be directed to direct enrollment entities that only offer assistance
with a limited selection of products and some of those products may not
provide, for example, MEC for consumers.\45\ Many commenters raised
concerns that this consumer confusion or limited product selection
through direct enrollment entities could also potentially disrupt
coordination of coverage with other insurance affordability programs,
including Medicaid and CHIP, which is inconsistent with our ``no wrong
door'' policy.\46\ In addition, these consequences could act as an
unnecessary barrier to consumers seeking Medicaid or ACA coverage
rather than facilitating enrollment, and could have additional
downstream impacts including an increased uninsured or underinsured
population, or more consumers enrolled in less comprehensive coverage
options. Commenters noted that these downstream impacts could lead to
health inequities by disparately impacting certain vulnerable groups
that tend to have a greater need for comprehensive coverage or rely
more heavily on Medicaid and CHIP. These concerns and the accompanying
risks to the health and well-being of vulnerable groups and consumers
in general are heightened as the COVID-19 PHE continues.
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\45\ Multiple commenters cited the following report as support
for their comments related to DE entities offering limited plan
selection and potential disruptions to coordination of coverage with
other insurance affordability programs: <a href="https://www.cbpp.org/research/health/direct-enrollment-in-marketplace-coverage-lacks-protections-for-consumers-exposes">https://www.cbpp.org/research/health/direct-enrollment-in-marketplace-coverage-lacks-protections-for-consumers-exposes</a>.
\46\ This policy is intended to ensure that consumers can
complete a single eligibility application to receive determinations
of eligibility across multiple health insurance affordability
programs, including for QHPs, APTC, CSRs, as well as Medicaid and
CHIP. See, for example, sections 1311(d)(4)(F) and 1413 of the ACA.
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By finding the Exchange DE option inconsistent with recent
Executive Orders, to ensure that resources are not diverted from
fulfilling requirements under the new health care legislation and other
initiatives like the COVID special enrollment period, and because no
state has yet expressed interest in implementing the Exchange DE
option, we propose to remove Sec. 155.221(j) and repeal the Exchange
DE option. As explained in the preamble section regarding user fee
rates for the 2022 benefit year (Sec. 156.50), we also propose to
repeal the accompanying user fee rate for FFE-DE and SBE-FP-DE states
for 2023. We seek comment on this proposal.
4. Open Enrollment Period Extension (Sec. 155.410(e))
We propose to amend paragraph (e) of Sec. 155.410, which provides
the dates for the annual Exchange open enrollment period in which
qualified individuals and enrollees may apply for or change coverage in
a QHP. The Exchange open enrollment period is extended by cross-
reference to non-grandfathered plans in the individual market, both
inside and outside of an Exchange, under guaranteed availability
regulations at Sec. 147.104(b)(1)(ii). HHS is specifically proposing
to alter the open enrollment period for the 2022 coverage year and
beyond so that it begins on November 1 and runs through January 15 of
the applicable benefit year.
In previous rulemaking, we established that the open enrollment
period for benefit years beginning on or after January 1, 2018 would
begin on November 1, 2021 and extend through December 15, 2021. In
doing so, we indicated a preference for a shorter month-and-a-half open
enrollment period, noting our belief that it provides sufficient time
for consumers to enroll in or change QHPs and that an end date of
December 15th carries the benefit of ensuring consumers receive a full
year of coverage and simplifies operational processes for issuers and
the Exchanges.\47\ Accordingly, the annual open enrollment period dates
have been set to November 1st through December 15\th\ for the 2018,
2019, 2020, and 2021 plan years. We have observed several benefits
using the present open enrollment period dates. Prior enrollment data
suggests that the majority of new consumers to the Exchange select
plans prior to December 15th so as to have coverage beginning January
1st. After 4 years, we believe
[[Page 35168]]
consumers have become accustomed to a December 15th end date for the
annual open enrollment period. Consistency in open enrollment dates
promotes consumer confidence, and a December end date generally aligns
with the open enrollment dates for other health insurance programs such
as Medicare and employer-based health plans.
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\47\ See 82 FR 18346 at 18381.
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We also observed that consumer casework volumes related to coverage
start dates and inadvertent dual enrollment decreased in the years
after the December 15th end date was adopted, suggesting that the
consumer experience was improved by having a singular deadline of
December 15th to enroll in coverage for the upcoming plan year. We note
that an extension to January 15th may cause some previously observed
consumer confusion to resurface surrounding the need to enroll by
December 15th for a full year of coverage versus the final deadline of
January 15th to enroll for a plan that would begin on February 1st.
This confusion could cause some consumers to miss out on coverage for
the month of January altogether. A January 15th end date may also
require enrollment assisters allocate budget resources over a longer
period of time.
However, after observing the effects of a month-and-a-half open
enrollment period over these years, we have also observed negative
impacts to consumers that may justify an extension of the open
enrollment end date to January 15th. In particular, we have observed
that consumers who receive financial assistance, who do not actively
update their applications during the open enrollment period, and who
are automatically re-enrolled into a plan are subject to unexpected
plan cost increases if they live in areas where the second lowest-cost
silver plan has dropped in price. These consumers will experience a
reduction in their allocation of APTC based on the second lowest-cost
silver plan price, but are often unaware of their increased plan
liabilities until they receive a bill from the issuer in early January
after the open enrollment period has concluded. Extending the open
enrollment end date to January 15th would allow these consumers the
opportunity to change plans after receiving updated plan cost
information from their issuer and to select a new plan that is more
affordable to them. We have also observed concerns from Navigators,
CACs, and agents and brokers that the current open enrollment period
does not leave enough time for them to fully assist all interested
Exchange applicants with their plan choices. Extending the open
enrollment end date to January 15th would allow more time for consumers
to seek assistance from one of these entities. Together, the impacts of
providing consumers with more time to react to updated plan cost
information and more time to seek enrollment assistance may improve
access to health coverage. The additional time for enrollment
assistance provided by this proposal may be particularly beneficial to
consumers in underserved communities who may face time or language
barriers in accessing health coverage by extending the period in which
these consumers can seek in-person assistance to enroll.
We seek comment on whether a January 15th end date would provide a
balanced approach to providing consumers with additional time to make
informed plan choices and increasing access to health coverage, while
mitigating risks of adverse selection, consumer confusion, and issuer
and Exchange operational burden. We invite comments from stakeholders
that would experience specific benefits or adverse effects from a
January 15th end date, and encourage comments on potential impacts to
resources, consumer assistance budgets, overall enrollment numbers,
premiums, and market stability. We seek comments on whether this
extension would incentivize consumers who need coverage to begin on
January 1st to still make a choice and enroll by December 15th, while
also preserving sufficient time in the remainder of the plan year for
issuers and Exchanges to perform other obligations such as QHP
certification.
We further invite comments on alternative approaches to extending
open enrollment to address coverage gaps or enrollment challenges
facing consumers and stakeholders. We also invite comments to address
whether HHS should explore the possibility of a new special enrollment
period, such as for current enrollees who are automatically re-enrolled
and experienced a significant cost increase, to address concerns for
specific consumer challenges as an alternative to extending the annual
open enrollment period. We are also considering whether approaches such
as enhanced noticing or special, targeted outreach would address the
needs of consumers who are automatically re-enrolled in areas where the
second lowest-cost silver plan drops in value, thereby reducing APTC
amounts. We seek comment on how we may improve communications and
consumer engagement around potential cost changes for consumers who do
not actively re-enroll in coverage. We are also considering if improved
education and outreach during the coverage year to raise awareness of
existing special enrollment period opportunities, such as those for
loss of coverage or becoming newly eligible or ineligible for financial
assistance, may serve consumers who do not enroll or change plans
during open enrollment. We seek comment on whether adoption of these or
other outreach approaches would be a viable alternate approach to
finalizing our proposal to extend the open enrollment end date to
January 15th.
We anticipate that if an open enrollment end date of January 15th
were finalized, this change would apply to all Exchanges, including
State Exchanges for the 2022 coverage year and beyond. We note that in
preceding plan years, a majority of State Exchanges have used special
enrollment period authority to offer additional enrollment time beyond
the end date of December 15th in the Exchanges on the Federal platform.
We invite additional comments on State Exchange flexibility, as well as
operational challenges relating to State Exchange implementation of the
proposed change for 2022 and beyond.
5. Monthly Special Enrollment Period for APTC-Eligible Qualified
Individuals With a Household Income No Greater Than 150 Percent of the
Federal Poverty Level (Sec. 155.420(d)(16))
In order to make affordable coverage available to more consumers,
we propose to codify a monthly special enrollment period for qualified
individuals or enrollees, or the dependents of a qualified individual
or enrollee, who are eligible for APTC, and whose household income is
expected to be no greater than 150 percent of the FPL.\48\ Section 9661
of the ARP amended section 36B(b)(3)(A) of the Code to decrease the
applicable
[[Page 35169]]
percentages used to calculate the amount of household income a taxpayer
is required to contribute to their second lowest cost silver plan for
tax years 2021 and 2022.\49\ The applicable percentages are used in
combination with factors including annual household income and the cost
of the benchmark plan to determine the PTC amount for which a taxpayer
can qualify to help pay for a QHP on an Exchange for themselves and
their dependents.\50\ These decreased percentages generally result in
increased PTC for PTC-eligible taxpayers. For those with household
incomes no greater than 150 percent of the FPL, the new applicable
percentage is zero. As a result of these changes, many low-income
consumers whose QHP coverage can be fully paid for with APTC have one
or more options to enroll in a silver-level plan without needing to pay
a premium after the application of APTC. All of these consumers, if
eligible to enroll through an Exchange and to receive APTC, will
qualify for CSRs to enroll in a silver plan with an AV of 94
percent.\51\
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\48\ Generally, a qualifying individual is not eligible for a
PTC if their income is below 100 percent of the FPL. However, there
are a small number of consumers with a household income below 100
percent of the FPL who may qualify for APTC. Specifically, section
1401 of the ACA amended section 36B of the Code to provide that a
taxpayer with a household income which is not greater than 100
percent of the FPL, and who is a lawfully present immigrant and
ineligible for Medicaid due to their immigration status, may qualify
for a PTC. Consumers for whom this is the case would be able to
qualify for the proposed special enrollment period, as well.
Additionally, we note that because individuals would qualify for
this special enrollment period based on their household income
level, household members who apply for coverage with financial
assistance together generally will all qualify for the special
enrollment period. However, it is also possible that one household
member could trigger the special enrollment period based on a change
in their eligibility for APTC--for example, a household member who
loses access to an offer of coverage through an employer that is
considered affordable based on 26 CFR 1.36B02(c)(3)(v).
\49\ Public Law 117-2.
\50\ See 26 CFR 1.36B-3(g) for more information on the
applicable percentage and its relationship to the PTC.
\51\ See Sec. Sec. 155.305(g)(2) and 156.420(a).
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We propose that this special enrollment period be available at the
option of the Exchange, in order to allow State Exchanges to decide
whether to implement it based on their specific market dynamics, needs,
and priorities. Additionally, we propose that Exchanges on the Federal
platform will implement this special enrollment period by providing
qualified individuals who are eligible with a pathway to access it
through the <a href="http://HealthCare.gov">HealthCare.gov</a> application. We propose that implementation
in Exchanges on the Federal platform be consistent with current special
enrollment period policy and operations, in particular such that there
is no limitation on how often individuals who are eligible for this
special enrollment period can obtain or utilize it.\52\ Consistency in
this area will mitigate consumer and other stakeholder confusion and
simplify Exchange operations. To provide Exchanges with flexibility to
prioritize ensuring that qualifying individuals are able to obtain
coverage through this special enrollment period quickly following plan
selection, or to implement this special enrollment period in keeping
with their current operations, we propose to add a new paragraph at
Sec. 155.420(b)(2)(vii) to provide that the Exchange must ensure that
coverage is effective in accordance with paragraph (b)(1) of this
section or on the first day of the month following plan selection, at
the option of the Exchange.
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\52\ For example, those who qualify for the special enrollment
period per Sec. 155.420(d)(8) for qualifying individuals who gain
or maintain status as an Indian, as defined by section 4 of the
Indian Health Care Improvement Act, may change their plan selection
multiple times each month, noting that only the last plan selection
before the applicable cutoff date for coverage each month will take
effect for the month in question.
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We also propose to add a new paragraph at Sec.
155.420(a)(4)(ii)(D) to provide that an Exchange must permit eligible
enrollees and their dependents to change to a silver level plan, and to
amend paragraph Sec. 155.420(a)(4)(iii), which provides other plan
category limitations for other special enrollment periods, to provide
that these other plan category limitations do not apply to enrollees or
dependents who qualify for the proposed special enrollment period.\53\
While we expect that most consumers who qualify for this special
enrollment period will select a silver level plan because based on
their household income, they will be eligible to enroll in a silver
level plan with an actuarial value of 94 percent, as further discussed
below, we believe that ensuring that current Exchange enrollees do so
through plan category limitations will help to mitigate adverse
selection. Finally, we propose to add a new paragraph at Sec.
147.104(b)(2)(i)(G) to specify that issuers are not required to provide
this special enrollment period in the individual market with respect to
coverage offered outside of an Exchange, because eligibility for the
special enrollment period is based on eligibility for APTC, and APTC
cannot be applied to coverage offered outside of an Exchange.
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\53\ This provision would not prevent enrollees who qualify for
the new special enrollment period from changing to a plan of any
category through a special enrollment period that provides this
flexibility, including the special enrollment periods at Sec.
155.420(d)(4), (8), (9), (10), (12), and (14).
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The APTC benefit changes under the ARP make affordable coverage
available to more uninsured people. However, if past trends continue,
we believe that some consumers who qualify for these benefits under the
ARP may continue to forgo enrollment in premium-free coverage due to a
lack of awareness of the opportunity to enroll or a misconception about
what the coverage would cost. For example, a February 2021 HHS
Assistant Secretary for Planning and Evaluation (ASPE) issue brief \54\
indicates that, as of 2018, 20 percent of the uninsured had a household
income no higher than $35,000, which, in 2018, was under 150 percent of
the FPL for households with four or more members.\55\ A recent analysis
of American Community Survey (ACS) and U.S. Census data also indicates
that families with low incomes are more likely to be uninsured, and
that in 2019, more than 70 percent of uninsured adults said that they
were uninsured because the cost of coverage was too high. It also noted
that in 2019, almost 70 percent of uninsured, non-elderly adults had
lacked coverage for more than a year, and that this group may be
particularly difficult to reach with outreach and education
efforts.\56\
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\54\ Trends in the U.S. Uninsured Population, 2010-2020. Office
of the Assistant Secretary for Planning and Evaluation (ASPE),
February 11, 2021: <a href="https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf">https://aspe.hhs.gov/system/files/pdf/265041/trends-in-the-us-uninsured.pdf</a>.
\55\ 2017 Federal Poverty Guidelines. ASPE: <a href="https://aspe.hhs.gov/2017-poverty-guidelines">https://aspe.hhs.gov/2017-poverty-guidelines</a>. We refer to 2017 FPL
information to determine APTC eligibility for 2018 because, per 26
CFR 1.36B-1(h), the FPL for computing the PTC for a taxable year is
the FPL in effect on the first day of the initial or annual open
enrollment period preceding that taxable year. For example, ASPE
released 2020 FPL information in January 2020, and so 2020 FPL
information applies during the 2020 open enrollment period for 2021
coverage.
\56\ Key Facts about the Uninsured Population: Kaiser Family
Foundation; Nov 06, 2020, <a href="https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/">https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/</a>. <a href="https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/">https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/</a>.
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Therefore, while HHS will undertake extensive outreach and
engagement efforts to promote enrollment during the open enrollment
period for 2022 coverage and to help ensure consumer awareness of
existing special enrollment periods for which they may qualify, given
the established challenges with promoting awareness of access to
coverage among low-income consumers, we believe additional enrollment
opportunities for low-income consumers are appropriate and in the best
interest of low-income consumers. The proposed monthly special
enrollment period policy would align with E.O. 14009, which requires
federal agencies to identify and appropriately address policies that
create barriers to accessing ACA coverage, including access through
mid-year enrollment.
In addition to providing certain low-income individuals with
additional opportunities to newly enroll in free or low-cost coverage
that is available to them, we believe this special enrollment period
may help consumers who lose Medicaid coverage regain health care
coverage. These consumers can already qualify for a special enrollment
period due to their loss of Medicaid coverage, per Sec. 155.420(d)(1).
Additionally, Exchanges could provide consumers who do not learn of
their opportunity to enroll in Exchange coverage until after their 60-
day special enrollment period
[[Page 35170]]
has passed with additional time to enroll in health care coverage based
on the regulation at Sec. 155.420(c)(4) recently finalized in part 2
of the 2022 Payment Notice final rule to allow a qualified individual,
enrollee, or dependent who did not receive timely notice of a
triggering event and was otherwise reasonably unaware that a triggering
event occurred to select a new plan within 60 days of the date that he
or she knew, or reasonably should have known, of the occurrence of the
triggering event.\57\ However, whether consumers in these situations
are able to benefit from this flexibility may vary, and may require
Exchanges to assess eligibility on a case-by-case basis; it may also
require consumers who generally have low household income and who
therefore may face other barriers to accessing health care coverage,
such as low health insurance literacy levels and lack of internet
access, to be aware of the potential for an extended enrollment
timeframe and to request it from their Exchange. Therefore, while this
special enrollment period would not be limited to qualified individuals
who have lost Medicaid coverage, we believe that providing access to a
monthly enrollment opportunity could help some consumers who lose
Medicaid coverage to regain health insurance coverage, especially those
who do not initially realize that loss of Medicaid is a special
enrollment period triggering event.
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\57\ 86 FR 24220.
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Further, after the COVID-19 PHE comes to an end, we expect to see a
higher than usual volume of low-income individuals transitioning from
Medicaid coverage to the Exchange, for at least several months. This is
because states will begin to catch up on a backlog of redeterminations
and terminations for Medicaid beneficiaries with increased income
following the end of the COVID-19 PHE, after having generally suspended
Medicaid disenrollments since March 2020 to comply with the continuous
enrollment provisions in section 6008(b)(3) of the Families First
Coronavirus Response Act.\58\ Individuals with household income below
150 percent of the FPL frequently experience income fluctuations that
cause them to transition between Medicaid, CHIP, and Exchange coverage
with financial assistance. Further, the consumer eligibility
determination notices sent by state Medicaid and CHIP agencies can vary
greatly as far as content, including clarity about the consumer's next
steps to apply for other coverage, where and how to apply, and the
timeframes for doing so. Consumers who become ineligible for Medicaid
are at risk of being uninsured for a period of time and putting off
accessing health care, which can lead to poorer health outcomes, if
they are not ultimately able to successfully transition between
coverage programs.
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\58\ Public Law 116-127. These provisions enabled states to
receive the temporary Federal Medical Assistance Percentage increase
under that section.
---------------------------------------------------------------------------
For these consumers, 60 days may not be enough time to successfully
transition to Exchange coverage, leading to long-term lack of coverage.
We believe some of these consumers will benefit from additional time to
enroll in Exchange coverage. In some cases, the loss of Medicaid or
CHIP coverage comes at a time when consumers are least able to track
down new health coverage, but are most in need of it. An example of
this can be seen with consumers who lose pregnancy-related Medicaid or
CHIP coverage after the postpartum period, posing a health coverage
hurdle for new mothers at a time when access to health care is
paramount, but their ability to find and enroll in new coverage is
limited or impeded by their new childcare responsibilities.
Exchanges that elect to provide this proposed special enrollment
period would have the option to require consumers to submit
documentation to confirm their eligibility in accordance with their
pre- or post-enrollment verification programs. CMS will determine
eligibility for this special enrollment period in Exchanges on the
Federal platform based on consumers' attested household income. Once an
Exchange on the Federal platform grants this special enrollment period
to a consumer based on their attested household income, the Exchange
would then verify applicants' projected annual household income
consistent with 45 CFR 155.320(c).\59\ Specifically, CMS would continue
to require consumers whose projected annual household income cannot be
verified using a trusted electronic data source to submit documentation
to confirm their annual income (currently approved under OMB control
number 0938-1207/Expiration date February 29, 2024). However, we would
not require submission of household income documentation prior to
enrollment, and would not pend the enrollment as part of a pre-
enrollment verification process, because we believe that the post-
enrollment income verification process already in place is sufficient
to ensure program integrity because consumers who do not verify their
attested household income through the post-enrollment verification
process will have their APTC adjusted accordingly.
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\59\ Public Law 111-148.
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Further, CMS' experience administering the verification processes
for Exchanges on the Federal platform in accordance with Sec.
155.320(c) shows that submitting documentation quickly to verify income
can be especially onerous for those at the lowest income levels who may
not have ready access to a computer or smartphone, the internet, a
copier or scanner, or funds for postage. As noted above, consumers with
household incomes less than 150 percent of the FPL are most likely to
experience churn between our health care programs and would be
disproportionately affected by the delayed access to coverage that will
result while they complete the post-enrollment verification process.
For this reason, we are of the view that requiring pre-enrollment
verification would needlessly delay access to coverage for a
significant portion of eligible consumers; and that it is reasonable
and appropriate to allow applicants' enrollments to proceed subject to
post-enrollment verification of their household income, if additional
documentation is necessary due to inability to verify their household
income using a trusted electronic data source.
In addition to outreach and education efforts, we believe that
applying plan category limitations to this special enrollment period
would help to mitigate adverse selection because it would limit the
ability of enrollees to change to a higher metal level plan based on a
new health care need and then change back to a silver plan once the
health issue is resolved. However, enrollees may still choose to enroll
in a silver level plan that is more expensive than their zero dollar
option, and, with a monthly special enrollment period, could make this
change during the plan year based on a difference in provider network
or prescription drug formulary. We believe that enrollees who are
interested in changing plans during the year will likely be deterred
because such a change will generally mean they lose progress they have
made toward meeting their deductible and other accumulators. We seek
comment on this proposal and on whether, alternatively, plan category
limitations should not be applied. For example, we seek comment on
whether to instead exempt the proposed special enrollment period at
Sec. 155.420(d)(16) from plan category limitations in order to
alleviate the implementation burden on Exchanges, or due to a lack of
concern that eligible enrollees would use the proposed
[[Page 35171]]
special enrollment period to change to a plan category other than
silver.
Additionally, we believe that that access to premium-free or very
low-cost 94 percent AV coverage will help to mitigate risk of adverse
selection, because qualifying individuals will not have an incentive to
end coverage when health care services are no longer needed. However,
we seek comment on the degree to which the risk of adverse selection
increases due to the fact that not all qualifying individuals who have
a household income no greater than 150 percent of the FPL will have
access to a silver plan with a zero-dollar premium and therefore, due
to their small premium for a silver plan, might be more inclined to
enroll in coverage due to a health care need and end coverage once this
need has been met.
We estimate that this adverse selection risk may result in issuers
increasing premiums by approximately 0.5 to 2 percent, and a
corresponding increase in APTC outlays and decrease in income tax
revenues of approximately $250 million to $1 billion, when the enhanced
APTC provisions of the ARP are in effect. We describe this impact in
more detail and seek comment on it in the regulatory impact analysis
(RIA) section later in this proposed rule. We also discuss some of the
reasons adverse selection cannot be mitigated in the following
paragraphs.
The adverse selection risk presented by the proposal stems, in
part, from qualifying individuals who live in states where premiums for
Exchange coverage cannot be fully paid for with APTC,\60\ such that
these individuals will not have access to a silver plan with a zero-
dollar premium. Such individuals include residents of states that
require all QHPs in the state to cover services that do not qualify as
EHB, or that require coverage of certain abortion services for which
federal funding is prohibited, and we estimate that ten states may fall
into these categories. The portion of premium attributable to services
ineligible for APTC is generally small, but increases with age and
family size. Additionally, in a few locations, QHP issuers' plan
designs are such that both the lowest-cost silver plan and the second
lowest-cost silver plan \61\ cover services that do not qualify as
EHBs, which makes it impossible for most individuals, including those
whose household income does not exceed 150 percent of the FPL, to
access a silver plan with a zero dollar monthly premium.
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\60\ See section 1303(b)(2)(A) of the ACA and section
36B(b)(3)(D) of the Code.
\61\ The second lowest-cost silver plan is the ``benchmark
plan'' used to determine a household's APTC eligibility. See 26 CFR
1.36B-3(d)(1) and (f).
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Other household-level variation in access to a silver plan with a
zero-dollar premium includes households where some, but not all,
applicants are APTC-eligible (for example, a household with one or more
members with an offer of other MEC through a job), and households with
applicants living in different locations, because Exchanges must
determine APTC based on a benchmark plan specific to each location.\62\
In this case, the applicable premium amount will be based on the
subscriber's location, and so available APTC may not fully cover a
silver plan premium for the policy. Finally, households that include
one or more members who attest affirmatively to their smoking status
also may not qualify for an APTC amount sufficient to pay the full
premium of a silver plan, because consistent with 26 CFR 1.36B-3(e),
APTC eligibility is not determined using a benchmark plan that rates
for tobacco.\63\
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\62\ 26 CFR 1.36B-3(f)(4).
\63\ As of May 2021, CMS data indicate that 1-8 percent of
current enrollees, depending on the state, in Exchanges on the
Federal platform are rated for tobacco use.
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We seek comment from health insurance issuers and other
stakeholders on our position that adverse selection related to this
special enrollment period will be mitigated by the availability of free
or very low-cost coverage with a 94 percent AV and the application of
plan category limitations to this new special enrollment period, or
whether the adverse selection risk created by this new special
enrollment period cannot be sufficiently mitigated such that its
creation may result in significant rate increases. We also solicit
comment regarding whether health insurance issuers and other
stakeholders have concerns that the policy could cause any adverse
selection among higher income individuals with variable hours and
income. We also seek comment on whether the requirement that Exchanges
verify applicants' projected annual household income post-enrollment,
consistent with 45 CFR 155.320(c), is sufficient, or if there are other
measures we should put in place to further protect program integrity.
We also solicit comment on estimated implementation burdens for
Exchanges who elect to provide this additional enrollment opportunity,
including whether implementation of this special enrollment period will
be possible in time for consumers to benefit from it during the 2022
plan year. We request comment on whether issuers will have sufficient
time to adjust rate filings to account for any increased risk and
whether state regulators will have sufficient time to review those
filings after a final rule is issued.
We further request comment on whether this proposed special
enrollment period should be available indefinitely (as proposed), or
whether it should be time-limited. For example, we seek comment on
whether we should finalize the proposed special enrollment period to be
available only for coverage during years when enhanced APTC benefits
are also available, as provided by the section 9661 of the ARP or any
subsequent statute. Finally, we request comment on strategies for
providing outreach and education for consumers who may be eligible for
this special enrollment period, in particular to help qualifying
individuals understand and take advantage of the free or very low-cost
coverage that is available to them. Within this group, we request
comments on strategies for educating consumers who qualify to enroll in
a 94 percent AV silver plan about the benefits of enrolling in such a
plan even if they are required to pay a small premium, as opposed to
electing a premium-free bronze plan with a lower AV.
6. Clarification of Special Enrollment Period for Enrollees Who Are
Newly Eligible or Newly Ineligible for Advance Payments of the Premium
Tax Credit (Sec. 155.420(f))
We are proposing new language to clarify that, for purposes of the
special enrollment period rules at Sec. 155.420(d), references to
ineligibility for APTC refer to being ineligible for such payments or
being technically eligible for such payments but qualifying for a
maximum of zero dollars per month of such payments. That is, a
qualified individual, enrollee, or his or her dependent who is
technically eligible for APTC because they meet the criteria at Sec.
155.305(f), but who qualifies for a maximum APTC amount of zero
dollars, is also considered ineligible for APTC for purposes of these
special enrollment periods, even if they experience a change in
circumstance from an APTC ineligible status in accordance with Sec.
155.305(f), such as having other MEC. Currently, the special enrollment
periods to which this clarification is applicable are the triggering
events at Sec. 155.420(d)(6), but we propose that the clarification
apply to all of Sec. 155.420 to ensure consistency, for example,
between special enrollment period triggering events at Sec. 155.420(d)
and related coverage effective date and
[[Page 35172]]
enrollment window rules at Sec. 155.420(b) and (c), respectively.
We believe that the current special enrollment period rules that
reference APTC eligibility at Sec. 155.420(d)(6) could permit
inconsistent interpretations of what it means to be newly eligible or
ineligible for APTC. Exchange regulations at Sec. 155.305(f)(1) define
tax filers as APTC eligible if their expected household income for the
benefit year for which coverage is requested is greater than or equal
to 100 percent but not more than 400 percent of the FPL and they, or
their expected tax dependents for the year, (1) meet the requirements
for eligibility for enrollment in a QHP through the Exchange; and (2)
are not eligible for MEC, with the exception of coverage in the
individual market.
IRS rules at 26 CFR 1.36B-3 govern the APTC amount an individual
may receive once they are found eligible for APTC underSec.
155.420(d)(6). Pursuant to these IRS rules, an Exchange enrollee's
monthly APTC amount is the excess of the adjusted monthly premium for
the applicable benchmark plan \64\ over 1/12 of the product of the
taxpayer's household income and the applicable percentage for the
taxable year. Under this formula, if the applicable percentage of 1/12
of a taxpayer's estimated annual household income is higher than the
adjusted monthly premium of the relevant benchmark plan, a taxpayer
will be eligible generally for APTC under Sec. 155.305(f)(1), but will
qualify for a maximum APTC amount of zero dollars under 26 CFR 1.36B-3.
Currently, neither Sec. 155.305(f)(1) or 26 CFR 1.36B-3 recognize or
explain that an individual generally could be APTC eligible, but not
qualify to receive any amount in APTC greater than zero. The current
text of Sec. 155.420 similarly does not address this issue such that
there could exist some ambiguity about what it means to be APTC
eligible or ineligible for purposes of the special enrollment periods
under Sec. 155.420.
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\64\ Per IRS rules at 26 CFR 1.36B-3(f), the term ``benchmark
plan'' is generally used to refer to the second lowest-cost silver
plan, as described in section 1302(d)(1)(B) of the ACA (42 U.S.C.
18022(d)(1)(B)), offered to the taxpayer's coverage family through
the Exchange for the rating area where the taxpayer resides.
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We propose to add text to Sec. 155.420 to clarify that an
individual who qualifies for a maximum APTC amount of zero dollars is
considered ineligible for APTC for purposes of the Sec. 155.420's
special enrollment periods. Specifically, any determination that an
individual cannot receive an APTC amount greater than zero dollars is
equivalent to being found APTC ineligible for purposes of special
enrollment period eligibility under Sec. 155.420(d). We believe this
interpretation comports with the perspective of an applicant for
Exchange coverage who will take their available financial assistance
amount into account when selecting a QHP for the upcoming coverage year
and who may wish to change their QHP partway through a coverage year
because of a change in their financial assistance. Because we believe
that the current regulation permits this interpretation, but could
instead be interpreted to require strict adherence to the listed
requirements for APTC eligibility at Sec. 155.305(f) (which does not
address situations where a consumer meets these requirements but
qualifies for a zero dollar APTC amount), we are proposing regulation
text to ensure consistent and correct interpretation of what it means
to be determined ineligible for APTC. This reading of APTC
ineligibility is also consistent with our discussion of the policy in
previous rulemaking. For example, in the 2020 Payment Notice final
rule,\65\ we added a new paragraph at Sec. 155.420(d)(6)(v) allowing
Exchanges to provide a special enrollment period for qualified
individuals who experience a decrease in household income and receive a
new determination of eligibility for APTC by an Exchange, and who had
MEC for one or more days during the 60 days preceding the financial
change.
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\65\ 84 FR 17526.
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We believe that this clarification should also apply to special
enrollment periods provided in Sec. 155.420(d)(6)(iii) through (v),
which include special enrollment periods for individuals who become
newly eligible for APTC. Section 155.420(d)(6)(iii) provides a special
enrollment period for individuals who are enrolled in an employer-
sponsored plan, and who are determined newly eligible for APTC, in
part, because they are no longer eligible for qualifying coverage in an
eligible-employer sponsored plan in accordance with 26 CFR 1.36B-
2(c)(3) (for example, because their employer changed the coverage), and
who are allowed to terminate their employer-sponsored coverage. We do
not expect that this special enrollment period would be helpful to
individuals who qualify for a maximum APTC amount of zero dollars
because they would not receive assistance to help pay for monthly QHP
premiums. Further, it likely would not benefit individuals currently
enrolled in employer-sponsored coverage to change to a QHP without the
benefit of an APTC dollar amount greater than zero, in part because
changing plans in the middle of the plan year would cause their
deductible and other accumulators to be reset. We seek comments on this
proposal.
We believe that this clarification will be especially helpful in
light of the removal of the upper APTC eligibility limit on household
income at 400 percent of the FPL for taxable years 2021 and 2022 under
the ARP.\66\ This is because, with this change, any applicants with
household incomes over 400 percent of the FPL may be eligible for APTC,
more consumers likely will qualify for APTC technically, but for an
APTC amount of zero dollars. This clarification ensures that special
enrollment period regulations clearly reflect that enrollees for whom
this is the case may qualify for a special enrollment period based on a
decrease in their household income, or any other change that makes them
newly eligible for an APTC amount of greater than zero dollars.
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\66\ Public Law 117-2.
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Additionally, this clarification is important because it helps
ensure transparency in terms of why enrollees in certain situations
that appear similar would not both qualify for one of the special
enrollment periods at Sec. 155.420(d)(6). For example, the new
affordability provisions in the ARP allow for a situation where an
enrollee with a household income above 400 percent of the FPL is newly
determined to qualify for an APTC amount of zero dollars (as opposed to
APTC-ineligible simply by virtue of exceeding the household income
limit), while another enrollee with a household income above 400
percent of the FPL who is residing in a different service area is newly
determined eligible for an APTC amount of more than zero dollars based
on the cost of their benchmark plan.\67\ Both enrollees have received
new determinations of APTC eligibility based just being enrolled in
Exchange coverage and not having another offer of MEC, but only the
latter enrollee who is determined eligible for an APTC amount of
greater than zero dollars is intended to be eligible for the special
enrollment periods at Sec. 155.420(d)(6). We believe the proposed new
language provides needed clarity regarding the eligibility parameters
of this special enrollment period to enrollees, particularly
[[Page 35173]]
enrollees with household incomes above 400 percent of the FPL.
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\67\ In Exchanges on the Federal platform, where most ARP
changes to APTC eligibility were implemented on April 1, 2021,
enrollees in this situation could change their QHP coverage through
the 2021 special enrollment period; however, this enrollment window
was not available through all Exchanges.
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Exchange regulations at Sec. 155.420(d)(6) provide several special
enrollment periods for enrollees and dependents based on a
determination that they are newly eligible or newly ineligible for
APTC. These special enrollment periods vary in terms of the details of
their qualifying events, but all of them are dedicated to ensuring that
current Exchange enrollees and other qualified individuals who become
newly eligible or ineligible for APTC have an opportunity to re-assess
previous decisions about their QHP enrollment, or their decision not to
enroll in a QHP, based on gaining or losing eligibility for financial
assistance available to them to help lower premiums. Ensuring that
Exchanges consistently apply eligibility factors for these special
enrollment periods is important under a variety of circumstances. For
example, regulations at Sec. 155.420(d)(6)(i) and (ii) provide current
Exchange enrollees with an opportunity to change to a different QHP if
they are determined newly eligible or newly ineligible for APTC for
themselves or their dependents (or have a change in eligibility for
CSRs), because such a change may impact the coverage they prefer or the
type of coverage they can afford.
Section 155.420(d)(6)(iv) allows individuals to enroll in Exchange
coverage if they either experience a change in household income or move
to a different state, and as a result become newly eligible for APTC,
after they were previously ineligible for APTC solely because of a
household income below 100 percent of the FPL and, during the same
timeframe, were ineligible for Medicaid because they lived in a non-
Medicaid expansion state. Like the other qualifying events at Sec.
155.420(d)(6), this special enrollment period benefits individuals
because it allows them to take advantage of APTC for which they were
previously ineligible, and we do not believe that it would benefit
individuals who newly qualify for APTC but who are not entitled to an
APTC amount greater than zero dollars. We also believe that, regarding
the group of potentially eligible individuals, increases from a
household income of less than 100 percent of the FPL to a household
income high enough to qualify for an APTC amount of zero dollars are
relatively uncommon.
Finally, Sec. 155.420(d)(6)(v) provides a pathway for individuals
who had MEC for at least one of the past 60 days to enroll in Exchange
coverage if they experience a decrease in household income and the
Exchange newly determines them eligible for APTC. This special
enrollment period was established in the 2020 Payment Notice,
specifically to permit individuals enrolled in coverage outside of the
Exchange to enroll in Exchange coverage based on newly being able to
access APTC.\68\ Because this special enrollment period benefits
qualified individuals by allowing them to obtain coverage that permits
them to qualify for APTC, we do not believe that individuals who newly
qualify for an APTC amount of zero dollars generally benefit from this
special enrollment period, and they may even be harmed by changing
plans mid-year because this would generally cause their deductible and
other accumulators to be re-set.
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\68\ 84 FR 17526.
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We seek comment on this proposal, including from State Exchanges,
regarding whether this definition of APTC eligibility reflects their
current implementation of the special enrollment period qualifying
events per Sec. 155.420(d)(6), and if not, whether there are policy
concerns about this clarification, or the burden of making related
changes to Exchange operations. We also seek comment on whether we
should provide Exchanges with flexibility in terms of when they are
required to ensure that their operations reflect this definition, and
whether Exchanges should be permitted to adopt a more inclusive
definition, for example, to consider an individual to be newly eligible
or ineligible for APTC for purposes of the special enrollment periods
at Sec. 155.420(d)(6) based on a change from a zero-dollar maximum
APTC amount to APTC ineligibility for another reason per regulations at
Sec. 155.305(f).
Additionally, we seek comment on whether the clarification that a
qualified individual, enrollee, or his or her dependent is considered
APTC ineligible if they meet the requirements at Sec. 155.305(f), but
qualify for a maximum APTC amount of zero dollars, should be applied as
proposed to all of the special enrollment period qualifying events at
Sec. 155.420(d)(6), or whether it should be limited to only apply to
some of them. For example, we seek comment on whether we should only
apply this clarification to the special enrollment periods at Sec.
155.420(d)(6)(i) and (ii) and (iv) and (v), to permit individuals whose
employer-sponsored coverage is no longer considered affordable or no
longer meets the minimum value standard to qualify for a special
enrollment period to enroll in Exchange coverage through Sec.
155.420(d)(6)(iii) regardless of whether they qualify for an APTC
amount of greater than zero dollars.
C. Part 156--Health Insurance Issuer Standards Under the Affordable
Care Act, Including Standards Related to Exchanges
1. User Fee Rates for the 2022 Benefit Year (Sec. 156.50)
In the December 4, 2020 Federal Register, we published the proposed
2022 Payment Notice that proposed to reduce fiscal and regulatory
burdens across different program areas and to provide stakeholders with
greater flexibility. In the January 19, 2021 Federal Register (86 FR
6138), we published part 1 of the 2022 Payment Notice final rule that
addressed a subset of the policies proposed in the proposed rule. That
final rule, among other things, finalized the user fee rates for
issuers offering QHPs through the FFE at 2.25 percent of total monthly
premiums, and the user fee rate for issuers offering QHPs through SBE-
FPs at 1.75 percent of total monthly premiums.
On January 28, 2021, President Biden issued E.O. 14009,
``Strengthening Medicaid and the Affordable Care Act,'' \69\ directing
HHS, and the heads of all other executive departments and agencies with
authorities and responsibilities related to the ACA, to review all
existing regulations, orders, guidance documents, policies, and any
other similar agency actions to determine whether such agency actions
are inconsistent with this Administration's policy to protect and
strengthen the ACA and to make high-quality health care accessible and
affordable for every American. As part of this review, HHS examined
policies and requirements under the proposed 2022 Payment Notice and
part 1 of the 2022 Payment Notice final rule to analyze whether the
policies under these rulemakings might undermine the Health Benefits
Exchanges or the health insurance markets, and whether they may present
unnecessary barriers to individuals and families attempting to access
health coverage. HHS also considered whether to suspend, revise, or
rescind any such actions through appropriate administrative action.
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\69\ 86 FR 7793 (Feb. 2, 2021).
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In compliance with E.O. 14009 and as a result of HHS's review of
the proposed 2022 Payment Notice and part 1 of the 2022 Payment Notice
final rule, we have reanalyzed the additional costs of expanded
services, such as consumer outreach and education in the FFE and SBE-
FPs, and Navigators in the FFE in 2022. As explained in part 2 of the
2022
[[Page 35174]]
Payment Notice final rule,\70\ we indicated the intention to propose to
increase the user fee rates for the 2022 benefit year in future
rulemaking. Therefore, in this rule, HHS proposes new QHP issuer user
fee rates for the 2022 plan year: A new FFE user fee rate of 2.75
percent of total monthly premiums, and a new SBE-FP user fee rate of
2.25 percent of monthly premiums. These proposed rates are based on
internal projections of federal costs for providing special benefits to
FFE and SBE-FP issuers during the 2022 benefit year, taking into
account estimated changes in parameters, specifically the increased
funding to the FFE Navigator program and consumer outreach and
education. HHS is of the view that pursuit of this proposal is
necessary for consistency with E.O. 14009 and this Administration's
goal of protecting and strengthening the ACA and making high-quality
health care accessible and affordable for every American. We believe
that expanded outreach and education will lead to broader risk pools,
lower premiums, fewer uninsured consumers, and expanded use of Exchange
services.
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\70\ 86 FR 24140, 24288.
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Section 1311(d)(5)(A) of the ACA permits an Exchange to charge
assessments or user fees on participating health insurance issuers as a
means of generating funding to support its operations. If a state does
not elect to operate an Exchange or does not have an approved Exchange,
section 1321(c)(1) of the ACA directs HHS to operate an Exchange within
the state. Accordingly, in Sec. 156.50(c), we specify that a
participating issuer offering a plan through an FFE or SBE-FP must
remit a user fee to HHS each month that is equal to the product of the
annual user fee rate specified in the annual HHS notice of benefit and
payment parameters for FFEs and SBE-FPs for the applicable benefit year
and the monthly premium charged by the issuer for each policy where
enrollment is through an FFE or SBE-FP. In addition, OMB Circular No.
A-25 establishes federal policy regarding the assessment of user fee
charges under other statutes, and applies to the extent permitted by
law. Furthermore, OMB Circular No. A-25 specifically provides that a
user fee charge will be assessed against each identifiable recipient of
special benefits derived from federal activities beyond those received
by the general public.
Activities performed by the federal government that do not provide
issuers participating in an FFE with a special benefit, or that are
performed by the federal government for all QHPs, including those
offered through State Exchanges, are not covered by this user fee. As
in benefit years 2014 through 2021, issuers seeking to participate in
an FFE in the 2022 benefit year will receive two special benefits not
available to the general public: (1) The certification of their plans
as QHPs; and (2) the ability to sell health insurance coverage through
an FFE to individuals determined eligible for enrollment in a QHP.
a. FFE User Fee Rate
For the 2022 benefit year, issuers participating in an FFE will
receive the benefits of the following federal activities:
Under Consumer Information and Outreach:
<bullet> Provision of consumer assistance tools;
<bullet> Consumer outreach and education; and
<bullet> Management of a Navigator program.
Under Health Plan Bid Review, Management, and Oversight:
<bullet> Certification processes for QHPs (including ongoing
compliance verification, recertification, and decertification); and
<bullet> Regulation of agents and brokers.
Under Eligibility and Enrollment:
<bullet> Eligibility determinations; and
<bullet> Enrollment processes.
Activities through which FFE issuers receive a special benefit also
include use of the Health Insurance and Oversight System (HIOS), which
is partially funded by FFE and SBE-FP user fees, and the
Multidimensional Insurance Data Analytics System (MIDAS) platform,
which is fully funded by FFE and SBE-FP user fees. In light of E.O.
14009,\71\ published on January 28, 2021, the administration has a
priority to increase accessibility and affordability of health care for
every American. Consistent with increasing accessibility for every
American an expanded budget for consumer support activities and
Navigators was developed, and HHS conducted additional analytic review
which revealed that the user fee rates established in part 1 of the
2022 Payment Notice final rule \72\ need to be increased to sustain
essential Exchange-related activities. Based on this new analysis of
the increased contract costs and projected premiums and enrollment
(including changes in FFE enrollment resulting from anticipated
establishment of State Exchanges or SBE-FPs in certain states in which
FFEs currently are operating) for the 2022 plan year, we are proposing
to establish the FFE user fee for all participating FFE issuers at 2.75
percent of total monthly premiums.
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\71\ 86 FR 7793 (Feb. 2, 2021).
\72\ 86 FR 6138 at 6152.
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We seek comment on this proposed FFE user fee rate for 2022.
b. SBE-FP User Fee Rate
As previously discussed, OMB Circular No. A-25 establishes federal
policy regarding user fees, and specifies that a user charge will be
assessed against each identifiable recipient for special benefits
derived from federal activities beyond those received by the general
public.
SBE-FPs enter into a Federal platform agreement with HHS to
leverage the systems established for the FFEs to perform certain
Exchange functions, and to enhance efficiency and coordination between
state and federal programs. Accordingly, in Sec. 156.50(c)(2), we
specify that an issuer offering a plan through an SBE-FP must remit a
user fee to HHS, in the timeframe and manner established by HHS, equal
to the product of the monthly user fee rate specified in the annual HHS
notice of benefit and payment parameters for the applicable benefit
year and the monthly premium charged by the issuer for each policy
where enrollment is through an SBE-FP, unless the SBE-FP and HHS agree
on an alternative mechanism to collect the funds from the SBE-FP or
state.
The benefits provided to issuers in SBE-FPs by the federal
government include use of the federal Exchange information technology
and call center infrastructure used in connection with eligibility
determinations for enrollment in QHPs and other applicable state health
subsidy programs, as defined at section 1413(e) of the ACA, and QHP
enrollment functions under Sec. 155.400. The user fee rate for SBE-FPs
is calculated based on the proportion of FFE costs that are associated
with the FFE information technology infrastructure, the consumer call
center infrastructure, and eligibility and enrollment services, and
allocating a share of those costs to issuers in the relevant SBE-FPs,
as issuers in SBE-FPs receive those special benefits and will be able
to access the increased consumer support and education.
Similar to the FFE, activities through which SBE-FP issuers receive
a special benefit also include use of HIOS, which is partially funded
by FFE and SBE-FP user fees, and the MIDAS platform, which is fully
funded by FFE and SBE-FP user fees. In light of E.O. 14009,\73\ the
[[Page 35175]]
administration has a priority to increase accessibility and
affordability of health care for every American. Consistent with
increasing accessibility for every American an expanded budget for
consumer support activities and Navigators was developed, and HHS
conducted additional analytic review which revealed that the user fee
rates established in part 1 of the 2022 Payment Notice final rule \74\
need to be increased to sustain essential Exchange-related activities.
Based on this new analysis of the increased contract costs and
projected premiums and enrollment (including changes in FFE enrollment
resulting from anticipated establishment of State Exchanges or SBE-FPs
in certain states in which FFEs currently are operating) for the 2022
plan year, we are proposing to establish the SBE-FP user fee for all
participating SBE-FP issuers at 2.25 percent of the monthly premium
charged by the issuer for each policy under plans offered through an
SBE-FP for benefit year 2022. We seek comment on the SBE-FP user fee
rate for 2022.
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\73\ 86 FR 7793 (Feb. 2, 2021).
\74\ 86 FR 6138 at 6152.
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c. 2023 Exchange DE Option User Fee Rate
In the January 19, 2021 Federal Register (86 FR 6138), we published
part 1 of the 2022 Payment Notice final rule that codified Sec.
155.221(j), which established a process for states to elect a new
Exchange DE option. When finalizing this new Exchange option, we also
finalized a 2023 user fee rate of 1.5 percent of the total monthly
premiums charged by issuers for each policy in FFE and SBE-FP states
that elect the Exchange DE option. As explained above, we propose to
repeal the Exchange DE option, accordingly we also propose to repeal
the user fee rate associated with Sec. 155.221(j) for the FFE-DE and
SBE-FP-DEs for 2023. We seek comment on this proposal.
2. Provision of EHB (Sec. 156.115)
We propose a technical amendment to Sec. 156.115. Section
156.115(a)(3) provides that, to satisfy the requirement to provide EHB,
a health plan must provide mental health and substance use disorder
services, including behavioral health treatment services required under
Sec. 156.110(a)(5), in a manner that complies with the parity
standards set forth in Sec. 146.136, implementing the requirements
under MHPAEA. Instead of referencing the regulation implementing
MHPAEA, we propose to reference section 2726 of the PHS Act and its
implementing regulations. We propose this change to make clear that
health plans must comply with all the requirements under MHPAEA,
including any amendments to MHPAEA, such as those made by the
Consolidated Appropriations Act, 2021,\75\ in order to satisfy the EHB
requirements.
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\75\ See section 203 of Title II of Division BB of the
Consolidated Appropriations Act, 2021, Public Law 116-260 (Dec. 27,
2020).
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3. Network Adequacy (Sec. 156.230)
As discussed in more detail in the preamble to Sec. 155.20, on
March 4, 2021, the United States District Court for the District of
Maryland decided City of Columbus v. Cochran, 2021 WL 825973 (D. Md.
Mar. 4, 2021). One of the policies the court vacated was the 2019
rule's elimination of the federal government's reviews of the network
adequacy of QHPs offered through the FFE in certain circumstances by
incorporating the results of the states' reviews.\76\
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\76\ This policy was first announced in the 2018 Letter to
Issuers in the Federally-facilitated Marketplaces, December 16,
2016, available at <a href="https://wayback.archive-it.org/2744/20200125161008/">https://wayback.archive-it.org/2744/20200125161008/</a> <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces-and-February-17-Addendum.pdf">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2018-Letter-to-Issuers-in-the-Federally-facilitated-Marketplaces-and-February-17-Addendum.pdf</a>. See also 83
FR 17024-17026.
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As we explained in part 2 of the 2022 Payment Notice final
rule,\77\ we intend to implement the court's decision through
rulemaking as soon as possible. However, we also will not be able to
fully implement the aspects of the court's decision regarding network
adequacy in time for issuers to design plans and for CMS to be prepared
to certify such plans as QHPs for the 2022 plan year. We instead intend
to address these issues in time for plan design and certification for
plan year 2023. Specifically, with the rule vacated, HHS would need to
set up a new network adequacy review process, and issuers would need
sufficient time before the applicable plan year to assess that their
networks meet the new regulatory standard, submit network information,
and have the information reviewed by applicable regulatory authorities
to have their plans certified as QHPs. Issuers might also have to
contract with other providers in order to meet the standard. This is
not feasible for the upcoming QHP certification cycle for the 2022 plan
year, which began April 22, 2021. We plan to propose specific steps to
address federal network adequacy reviews in future rulemaking. We
request comments and input regarding how the federal government should
approach network adequacy reviews.
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\77\ 86 FR 24140.
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4. Segregation of Funds for Abortion Services (Sec. 156.280)
Section 1303 of the ACA, as implemented in 45 CFR 156.280,
specifies standards for issuers of QHPs through the Exchanges that
cover abortion services for which federal funding is prohibited. The
statute and regulation establish that, unless otherwise prohibited by
state law, a QHP issuer may elect to cover such abortion services. If
an issuer elects to cover such services under a QHP sold through an
individual market Exchange, the issuer must take certain steps to
ensure that no PTC or CSR funds are used to pay for abortion services
for which public funding is prohibited, as required by statute.
Upon consideration of federal district court decisions invalidating
the policy, we are proposing to repeal the separate billing regulation
at Sec. 156.280(e)(2)(ii) that requires individual market QHP issuers
to send a separate bill for that portion of a policy holder's premium
that is attributable to coverage for abortion services for which
federal funds are prohibited and to instruct such policy holders to pay
for the separate bill in a separate transaction. Specifically, we
propose to revert to and codify in amended regulatory text at Sec.
156.280(e)(2)(ii) the prior policy announced in the preamble of the
2016 Payment Notice under which QHP issuers offering coverage of
abortion services for which federal funds are prohibited have
flexibility in selecting a method to comply with the separate payment
requirement in section 1303 of the ACA. Under this proposal, individual
market QHP issuers covering such abortion services would still be
expected to comply with all statutory requirements in section 1303 of
the ACA and all applicable regulatory requirements codified at Sec.
156.280.
Since 1976, Congress has included language, commonly known as the
Hyde Amendment, in the Labor, Health and Human Services, Education and
Related Agencies appropriations legislation.\78\ The Hyde Amendment, as
currently in effect, permits federal funds subject to its funding
limitations to be used for abortion services only in the limited cases
of rape, incest, or if a woman suffers from a physical disorder,
physical injury, or physical illness, including a life-endangering
physical condition caused by or arising from the pregnancy itself, that
would, as certified by a physician, place the woman in
[[Page 35176]]
danger of death unless an abortion is performed. Abortion coverage
beyond those limited circumstances is subject to the Hyde Amendment's
funding limitations which prohibit the use of federal funds for such
coverage.
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\78\ Accordingly, the Hyde Amendment is not permanent federal
law, but applies only to the extent reenacted by Congress from time
to time in appropriations legislation.
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Section 1303 of the ACA outlines requirements that issuers of
individual market QHPs covering abortion services for which federal
funds are prohibited must follow to ensure compliance with these
funding limitations. Section 1303(b)(2) prohibits QHPs from using any
amount attributable to PTC (including APTC) or CSRs (including advance
payments of those funds to an issuer, if any) for coverage of abortion
services for which federal funds are prohibited. Under sections
1303(b)(2)(B) and (b)(2)(D) of the ACA, as implemented in Sec.
156.280(e)(2)(i) and (e)(4), QHP issuers must collect a separate
payment from each enrollee without regard to the enrollee's age, sex,
or family status, for an amount equal to the greater of the actuarial
value of coverage of abortion services for which public funding is
prohibited, or $1 per enrollee per month. Section 1303(b)(2)(D) of the
ACA establishes certain requirements with respect to a QHP issuer's
estimation of the actuarial value of abortion services for which
federal funds are prohibited including that a QHP issuer may not
estimate such cost at less than $1 per enrollee, per month. Section
1303(b)(2)(C) of the ACA, as implemented at Sec. 156.280(e)(3),
requires that QHP issuers segregate funds for coverage of such abortion
services collected from enrollees into a separate allocation account
used to pay for such abortion services. Thus, if a QHP issuer disburses
funds for an abortion for which federal funds are prohibited on behalf
of an enrollee, it must draw those funds from the segregated allocation
account.
Notably, section 1303 of the ACA does not specify the method a QHP
issuer must use to comply with the separate payment requirement under
section 1303(b)(2)(B)(i) of the ACA. In the 2016 Payment Notice, we
provided guidance with respect to acceptable methods that an issuer of
individual market QHPs could use to comply with the separate payment
requirement.\79\ We stated that QHP issuers could satisfy the separate
payment requirement in one of several ways, including by sending the
enrollee a single monthly invoice or bill that separately itemized the
premium amount for coverage of abortion services for which federal
funds are prohibited; sending the enrollee a separate monthly bill for
these services; or sending the enrollee a notice at or soon after the
time of enrollment that the monthly invoice or bill will include a
separate charge for such services and specify the charge. We also
stated that an enrollee could make the payment for coverage of such
abortion services and the separate payment for coverage of all other
services in a single transaction.\80\ On October 6, 2017, we released a
bulletin that discussed the statutory requirements for separate
payment, as well as this previous guidance on the separate payment
requirement.\81\
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\79\ 80 FR 10750 (February 27, 2015).
\80\ 80 FR 10750 (February 27, 2015).
\81\ CMS Bulletin Addressing Enforcement of Section 1303 of the
Patient Protection and Affordable Care Act (October 6, 2017),
available at <a href="https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Section-1303-Bulletin-10-6-2017-FINAL-508.pdf">https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Section-1303-Bulletin-10-6-2017-FINAL-508.pdf</a>.
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The 2019 Program Integrity Rule \82\ prohibited the compliance
options that the 2016 Payment Notice previously provided to QHP issuers
with regard to the separate payment requirement. Specifically, the 2019
Program Integrity Rule finalized a policy requiring issuers of
individual market QHPs offering coverage of abortion services for which
federal funds are prohibited to send an entirely separate monthly bill
to policy holders just for the portion of the premium attributable to
coverage of such abortion services. QHP issuers were required to either
send separate paper bills (which could be sent in the same envelope or
mailing), or send separate bills electronically (which were required to
be in separate emails or electronic communications). The separate
billing regulation also required also required QHP issuers to instruct
the policy holder to pay for the portion of their premium attributable
to coverage of abortion services for which federal funds are prohibited
through a separate transaction from any payment made for the portion of
their premium not attributable to this coverage. It also required QHP
issuers to make reasonable efforts to collect the payments separately.
QHP issuers were to begin complying with these billing requirements on
or before the QHP issuer's first billing cycle following June 27, 2020.
Although HHS recognized that the previous methods of itemizing or
providing advance notice about the amounts noted as permissible in the
preamble of the 2016 Payment Notice arguably identifies two 'separate'
amounts for two separate purposes, HHS also reasoned that the separate
billing policy would better align the regulatory requirements for QHP
issuer billing of enrollee premiums with the intent of the separate
payment requirement in section 1303 of the ACA.\83\
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\82\ 84 FR 71674 (December 27, 2019).
\83\ 84 FR 71674, 71693 (December 27, 2019).
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HHS announced in the 2019 Program Integrity Rule that it would
exercise enforcement discretion to mitigate risk of inadvertent
coverage terminations that might result from enrollee confusion in
connection with receiving two separate bills for one insurance
contract. HHS explained that it would not take enforcement action
against a QHP issuer that implemented a policy under which the issuer
would not place an enrollee into a grace period and would not terminate
QHP coverage based solely on the policy holder's failure to pay the
separate bill. The 2019 Program Integrity Rule provided that HHS was
adopting this enforcement posture effective June 27, 2020.
In response to the proposal to adopt the separate billing
requirement finalized in the 2019 Program Integrity Rule, HHS also
received comments expressing concern that lack of transparency into
whether QHPs provided coverage of abortion services for which federal
funds are prohibited presented the risk that consumers could
unknowingly purchase such coverage. To address this risk, HHS announced
that as of the effective date of the final rule, February 25, 2020, it
would not take enforcement action against QHP issuers that allowed
enrollees to opt out of coverage of such abortion services by not
paying the separate bill for such services (the opt-out non-enforcement
policy). The opt-out non-enforcement policy effectively gave issuers
the flexibility to modify the benefits of a plan during a plan year
based on an enrollee's desire to opt out of a plan's coverage of such
abortion services.
In light of the immediate need for QHP issuers to divert resources
to respond to the COVID-19 PHE, HHS published an interim final rule
with comment in May 2020 for Medicare and Medicaid Programs, Basic
Health Programs and Exchanges (85 FR 27550) (``May 2020 IFC''). The
rule delayed by 60 days the date when individual market QHP issuers
would be required to begin separately billing policy holders. As
finalized at Sec. 156.280(e)(2)(ii), QHP issuers were expected to
comply with the separate billing regulation beginning on or before the
QHP issuer's first billing cycle following August 26, 2020. The May
2020 IFC noted that a 60-day delay was justified in light of the
ongoing litigation in the federal courts of Maryland, Washington, and
California challenging the separate billing regulation. The May 2020
IFC also noted that the extended
[[Page 35177]]
compliance deadline would only apply to the non-enforcement policy
under which issuers would have flexibility to refrain from triggering
grace periods or coverage terminations where a policy holder failed to
pay the separate monthly bill, delaying when this enforcement posture
would become available by 60 days (to August 26, 2020).
On April 9, 2020, the United States District Court for the Eastern
District of Washington issued an opinion declaring the separate billing
regulation invalid in the State of Washington.\84\ The district court
specifically found that the separate billing regulation was in conflict
with Washington's ``Single-Invoice Statute,'' \85\ which requires
health insurance issuers in the state to bill enrollees using a single
invoice. The district court held that the separate billing regulation
did not preempt Washington's Single-Invoice Statute.
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\84\ Washington v. Azar, 461 F. Supp. 3d 1016 (E.D. Wash. 2020).
\85\ Wash. Rev. Code Sec. 48.43.074.
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On July 10, 2020, the United States District Court for the District
of Maryland found the separate billing regulation to be contrary to
section 1554 of the ACA and arbitrary and capricious under the
Administrative Procedure Act, thus declaring it invalid and
unenforceable nationwide.\86\ The district court found the separate
billing regulation to be in conflict with section 1554 of the ACA,
which, among other key provisions, prohibits the Secretary from
promulgating regulations that create any unreasonable barriers to
obtaining appropriate medical care or impede timely access to health
care services. The district court concluded that the policy imposed an
unreasonable barrier because it would make it harder for enrollees to
pay for insurance because they must keep track of two separate bills,
which is likely to cause confusion and might lead to some enrollees
losing health insurance. The district court also held the separate
billing regulation to be arbitrary and capricious, finding that HHS
failed to provide a reasoned explanation for abandoning the policy that
existed prior to the adoption of the current separate billing
regulation in the 2019 Program Integrity Rule. The district court also
held that the implementation deadline was arbitrary and capricious
because HHS failed to consider and adequately address specific,
contrary evidence from regulated stakeholders that the implementation
deadline for compliance with the separate billing regulation was
unreasonable and would not provide QHP issuers with sufficient time to
comply.
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\86\ Planned Parenthood of Maryland, Inc. v. Azar, No. CV CCB-
20-00361 (D. Md. July 10, 2020); 5 U.S.C. 706.
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On July 20, 2020, the United States District Court for the Northern
District of California issued an opinion \87\ holding that the separate
billing regulation was arbitrary and capricious, setting it aside
nationwide. The district court held that the required mid-year
implementation date for issuers to comply with the separate billing
regulation would cause substantial transactional costs to states,
issuers, and enrollees without any corresponding benefit. The court
further found that the 2019 Program Integrity Rule lacked a reasoned
explanation for deviating from the prior acceptable methods available
to QHP issuers for compliance with the separate payment requirement and
for departing from industry billing practice.
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\87\ California v. U.S. Dep't of Health & Hum. Servs., 473 F.
Supp. 3d 992 (N.D. Cal. July 20, 2020).
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HHS initially appealed all three decisions, but those appeals have
been placed on hold following the recent change in administration.
The district courts in Maryland and California vacated the 2019
Program Integrity Rule's separate billing regulation in July 2020, in
advance of the postponed compliance deadline of August 26, 2020. As
such, the timing of the courts' actions could have dissuaded issuers
from assuming further costly administrative and operational burdens
that would have been required to build the separate billing policy into
their billing and IT systems. Further, as the courts' nationwide
invalidation of the policy prevented HHS from requiring initial
implementation of the separate billing regulation, the potential
consumer confusion over payment obligations, which could have
inadvertently led to non-payment of enrollee premium and subsequent
termination of consumer coverage, was also avoided. We believe it is
prudent to reconsider the separate billing policy and its potential
effects on consumer coverage.
In light of these developments, and upon consideration of court
decisions invalidating the policy, we have reassessed the value of the
separate billing policy and no longer believe it is justified in light
of the high burden it would impose on issuers, states, Exchanges, and
consumers, as well as the high likelihood of consumer confusion and
unintended losses of coverage. Nor do we believe section 1303 of the
ACA restricts issuers offering coverage of abortion services for which
federal funds are prohibited to collect the required separate payment
through a separate bill and instruct consumers to pay for such bill in
a separate transaction. Rather, section 1303 of the ACA outlines
requirements that issuers of individual market QHPs covering such
abortion services must follow to ensure that no public funding is
utilized for coverage of such abortion services, including requiring
issuers to collect separate payments for this portion of the premium,
to segregate the funds, and deposit such funds into separate allocation
accounts. As the 2019 Program Integrity Rule acknowledged, section 1303
of the ACA does not specify the method a QHP issuer must use to comply
with the separate payment requirement.\88\
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\88\ 84 FR 71674, 71683.
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To address these concerns, we are proposing amendments to Sec.
156.280(e)(2)(ii) to revert to and codify the policy previously adopted
in the 2016 Payment Notice such that QHP issuers offering coverage of
abortion services for which federal funds are prohibited may have
flexibility in selecting a reasonable method to comply with the section
1303 separate payment requirement. If finalized, acceptable methods for
satisfying the separate payment requirement would be outlined at Sec.
156.280(e)(2)(ii) and would include sending the policy holder a single
monthly invoice or bill that separately itemizes the premium amount for
coverage of such abortion services; sending the policy holder a
separate monthly bill for these services; or sending the policy holder
a notice at or soon after the time of enrollment that the monthly
invoice or bill will include a separate charge for such services and
specify the charge.
We are also proposing a technical change to the section heading of
Sec. 156.280 to more accurately reflect its contents if the revisions
to rule text under Sec. 156.280 are finalized. We propose that it
would instead read, ``Segregation of funds for abortion services.'' We
seek comment on these proposals.
Under the proposed amendments to the regulatory text at Sec.
156.280(e)(2)(ii), issuers would no longer be required to send separate
paper bills or separate electronic communications. Nor would an issuer
electing to send separate bills, or utilizing any of the proposed
acceptable methods for collecting the separate payment, be required to
instruct consumers to pay for the portion of their premium attributable
to coverage of abortion services for which federal funds are prohibited
in a
[[Page 35178]]
separate transaction, or to make efforts to collect these payments
separately.
If the proposed amendments to Sec. 156.280 are finalized, we
anticipate most issuers covering abortion services for which federal
funds are prohibited will decline to send two separate monthly bills,
and will choose to collect separate payments by one of the other
proposed acceptable methods, as those alternatives minimize
administrative complexity for issuers, align with industry billing
practice, are less costly and administratively burdensome, and promote
a more seamless consumer billing and payment experience. We would
encourage any issuer electing to send two separate monthly bills to do
so in a manner that minimizes consumer confusion and promotes
continuity of coverage. For example, if an issuer still chooses to send
two separate monthly bills, we encourage issuers to include both bills
in the same mailing, explain on both bills that the total premium due
is inclusive of the amount attributable to coverage of such abortion
services, and explain that the consumer may pay for both bills in a
single transaction. We also encourage issuers sending separate bills to
explain to the consumer that non-payment of any premium due, including
for the portion of premium attributable to such abortion services,
would continue to be subject to state and federal rules regarding grace
periods to mitigate risk of inadvertent loss of coverage from failure
to pay a portion of the premium due.
Reverting to the proposed policy would provide issuers greater
billing flexibility and allow issuers to bill using one of the proposed
acceptable methods that would eliminate all risk of inadvertent
coverage terminations that could result from consumer confusion due to
receiving two monthly bills (one for a miniscule amount) in connection
with one insurance policy. If the proposed policies in this rule are
finalized, we would discontinue the non-enforcement policies we adopted
in the 2019 Program Integrity Rule and the May 2020 IFC, described
above. These non-enforcement polices, in large part, were intended to
mitigate potential coverage losses resulting from enrollee confusion
that leads to enrollees' failures to pay the separate, small monthly
bill covering abortion services for which federal funds are prohibited.
In announcing these non-enforcement policies, HHS also noted in the
2019 Program Integrity Rule that the opt-out non-enforcement policy was
intended to address commenter concerns regarding insufficient
transparency into whether QHPs include coverage of abortion services
for which federal funds are prohibited and the risk that consumers
could unknowingly purchase QHPs that include such coverage. As part of
this discussion, HHS noted the steps already taken to improve
transparency regarding QHP offerings by making it easier for consumers
to select QHPs that they believe are best suited to their needs and
preferences. For instance, HHS noted that such information is available
during plan selection to more readily identify QHPs that offer coverage
of such abortion services.\89\ This information continues to be
available on <a href="http://HealthCare.gov">HealthCare.gov</a>, providing consumers with the requisite
information to make an informed choice about their plan selections
regarding coverage of such abortion services. Although we acknowledge
that there are some states where there may be no QHP available on the
Exchange that omits coverage for such abortion services, such plan
availability is subject to state law and issuer choice in plan design
as permitted under section 1303 of the ACA.
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\89\ Frequently Asked Questions for Agents, Brokers, and
Assisters Providing Consumers with Details on Plan Coverage of
Certain Abortion Services (November 21, 2018), available at <a href="https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf">https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQ-on-Providing-Consumers-with-Details-on-Plan-Coverage-of-Certain-Abortion-Services.pdf</a>.
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Section 1303(b)(1)(A)(ii) specifies that an issuer shall determine
whether or not the plan provides coverage for abortion services for
which federal funds are prohibited for the applicable plan year,
expressly providing that issuers are able to determine whether to offer
coverage for such abortion services, subject to state law. We are of
the view that continuing an opt-out non-enforcement policy would
conflict with this flexibility in issuer plan design provided under
section 1303. The opt-out non-enforcement policy also conflicts with
Sec. 147.106(e)(1), which specifies that only at the time of coverage
renewal may issuers modify the health insurance coverage for a product
offered to a group health plan or an individual, as applicable. It also
specifies that any such modification in the individual market must be
consistent with State law and be effective uniformly for all
individuals with that product. Further, the United States District
Court for the Northern District of California cited the opt-out non-
enforcement policy in finding that the 2019 Program Integrity Rule
lacked a reasoned explanation for deviating from the prior acceptable
methods available to QHP issuers for compliance with the separate
payment requirement.\90\ The court explained that inclusion of the opt-
out non-enforcement policy, which was not subject to public comment,
supported the court's conclusion that HHS changed its prior policy
without affording any reasoned explanation for the change. For these
reasons, and given that the separate billing requirements finalized in
the 2019 Program Integrity Rule have been invalidated, these non-
enforcement policies are no longer necessary or feasible long-term, and
are therefore discontinued.
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\90\ California v. U.S. Dep't of Health & Hum. Servs., 473 F.
Supp. 3d 992, 1003 (N.D. Cal. July 20, 2020) (citing Encino
Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125 (2016)).
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We note that individual market QHP issuers covering abortion
services for which federal funds are prohibited would still be expected
under these proposals to comply with section 1303 of the ACA and all
applicable requirements codified at Sec. 156.280. This includes
collecting a separate payment from each policy holder per month for an
amount equal to the greater of $1 or the actuarial value of coverage of
abortion services for which federal funds are prohibited, continuing to
ensure that no federal funding is used to pay for coverage of such
abortion services, submitting a segregation plan to the relevant state
insurance regulator, and continuing to segregate funds for coverage of
such abortion services collected from policy holders into a separate
allocation account that is to be used to pay for such abortion
services.
We believe the proposed changes to Sec. 156.280(e)(2)(ii) offer
issuers options for meaningful compliance with section 1303 and ensure
appropriate segregation of funds, without imposing the operational and
administrative burdens of the separate billing regulation and without
causing additional consumer confusion and unintended losses of
coverage. The preamble to the 2019 Program Integrity Rule acknowledged
that receipt by a QHP issuer of a single premium payment for the
entirety of the policy holder's coverage including abortion services
for which federal funds are prohibited did not preclude QHP issuer
compliance with the section 1303 separate payment requirement. Although
the separate billing regulation required QHP issuers to bill separately
and make reasonable efforts to collect the payment separately, it also
specified that QHP issuers would not be permitted to refuse a combined
payment or terminate the policy on the basis of combined payment. The
separate billing policy is ultimately nonessential to QHP issuer
compliance with the separate
[[Page 35179]]
payment requirement in section 1303 of the ACA. Upon receiving a single
premium payment inclusive of the portion of premium attributable to
coverage of such services, the QHP issuer may treat that portion as a
separate payment and disaggregate the amounts into the separate
allocation accounts, consistent with Sec. 156.280(e)(2)(iii).
Therefore, we believe requiring QHP issuers to acquire the separate
payment through sending separate bills and instructing consumers to pay
in separate transactions is more restrictive than necessary, especially
in light of the issuer and stakeholder burden and adverse consumer
impacts the separate billing regulation could impose.
The 2019 Program Integrity Rule detailed the anticipated financial
and operational burdens from the separate billing regulation. Those
burdens are discussed in further detail in section V, ``Collection of
Information Requirements,'' and section VII, ``Regulatory Impact
Analysis,'' of that rule. Those burdens included one-time cost
estimates for issuers and state Exchanges performing premium billing
and payment processing for operational changes such as implementation
of the technical build to implement the necessary system changes to
support separate billing and receipt of separate payments, which would
require significant changes to current billing practice and pose
increased challenges given the mid-plan year implementation timeline.
The anticipated burden also included ongoing annual costs for sending a
separate bill to impacted enrollees, associated record keeping,
customer service, and compliance, as well as annual materials costs
related to printing of and sending the separate bill. We also
acknowledged that the separate billing regulation would impose burden
on State Exchange operations due to one-time technical changes such as
updating online payment portals to accept separate payments and
updating enrollment materials, as well as ongoing annual costs
associated with increased customer service, outreach, and compliance.
The Program Integrity Rule also projected that FFEs would incur
additional costs due to one-time technical changes and increased call
volumes and additional customer services efforts. We also stated that
QHP issuers were likely to consider these new costs when setting
actuarially sound rates and that this would likely lead to higher
premiums for enrollees. We also anticipated increased costs to
consumers for the time required to read and understand the separate
bills and to seek help from customer service if necessary, and
additional time to read and send separate payments in subsequent
months. In total, the projected burden to all issuers, states, State
Exchanges performing premium billing and payment processing, the FFEs,
and consumers totaled $546.1 million in 2020, $232.1 million in 2021,
$230.7 million in 2022, and $229.3 million annually in 2023 and
onwards. It was also anticipated that QHP issuers might consider these
new costs when setting actuarially sound rates and that this could lead
to higher premiums for enrollees.
Upon reassessing the burden, we also believe the consumer confusion
and new logistical obstacles due to the separate billing regulation
would disproportionately burden communities who already face barriers
to accessing care, such as individuals with limited English proficiency
(LEP), individuals with disabilities, rural residents, those with
inconsistent or no access to the internet, those with low levels of
health care system literacy, and individuals within other marginalized
communities. Failure to pay the separate bill entirely due to consumer
confusion could also lead to a complete loss of coverage, further
exacerbating existing health disparities and jeopardizing health
outcomes. The 2019 Program Integrity Rule also acknowledged that the
high burden associated with the separate billing regulation might
result in issuers withdrawing coverage of abortion services for which
federal funds are prohibited altogether to avoid the associated burden,
requiring some enrollees to pay for these services out-of-pocket. Based
on a 2014 study, the average costs to patients for first-trimester
abortion care was $461, and anywhere from $860 to $1,874 for second-
trimester abortion care.\91\ Transferring these costs to enrollees
could disproportionately impact low-income women who may already face
barriers to accessing quality health care due to their socioeconomic
status, gender, sexual orientation, nationality, or race. We believe
proposing repeal of the separate billing regulation would remove these
burdensome requirements and obstacles, promoting health equity.
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\91\ See Roberts, Sarah C.M., Heather Gould, Katrina Kimport,
Tracy A. Weitz, and Diana Greene Foster. ``Out-of-Pocket Costs and
Insurance Coverage for Abortion in the United States.'' Women's
Health Issues, vol. 24, no. 2 (2014): e211-e218.
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The 2019 Program Integrity Rule reasoned that separate billing was
justified to better align with the Congressional intent of section
1303. Although we still believe sending a separate bill to enrollees
for these services is one way in which an issuer may satisfy the
separate payment requirement, we no longer believe it is the only
method contemplated by the plain reading of section 1303 and believe
restricting the acceptable methods for collecting these payments was
unnecessary, especially in light of the substantial anticipated burden
from the separate billing regulation, the risk of inadvertent coverage
terminations that could result from consumer confusion due to receiving
two monthly bills, the stakeholder reliance on the prior acceptable
methods, and federal district court concerns with barriers to
appropriate and timely medical care as well as a lack of corresponding
benefits. Consistent with federal district court orders in Maryland and
California, we revisited the section 1303 provision in which the
separate payment requirement is contained, which is titled
``Establishment of allocation accounts,'' and is in a larger section
titled ``Prohibition on the use of Federal funds.'' \92\ These sections
detail issuer requirements for calculating the actuarial value for the
portion of the premium attributable to coverage of abortion services
for which federal funds are prohibited, requires issuers to collect
separate payments for this portion of the premium, to segregate the
funds, and deposit such funds into separate allocation accounts.
Notably, these sections do not require that issuers must satisfy these
requirements by separately billing policy holders or instructing them
to pay in separate transactions.
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\92\ Section 1303(b)(2) and (b)(2)(B) of the ACA.
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Section 1303 does not specify the method a QHP issuer must use to
collect the separate payment.\93\ We are therefore proposing a policy
that allows issuers to satisfy the separate payment requirement through
methods consistent with section 1303 of the ACA, that imposes no more
burden on issuers, states, Exchanges, and consumers than is necessary,
and that removes unreasonable barriers to obtaining appropriate medical
care.
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\93\ 84 FR 71674, 71683.
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We seek comment on the proposal to repeal the separate billing
regulation and amend the regulatory text at Sec. 156.280(e)(2)(ii) to
codify the prior policy in the 2016 Payment Notice for satisfying the
separate payment requirement in section 1303 of the ACA.
[[Page 35180]]
IV. Provisions of the Proposed Rule for Section 1332 Waivers--
Department of Health and Human Services and Department of the Treasury
A. 31 CFR Part 33 and 45 CFR Part 155--Section 1332 Waivers
Section 1332 of the ACA permits states to apply for a section 1332
waiver to pursue innovative strategies for providing their residents
with access to higher value, more affordable health coverage.
Under section 1332, the Secretary of HHS and the Secretary of the
Treasury (collectively, the Secretaries) may exercise their discretion
to approve a request for a section 1332 waiver only if the Secretaries
determine that the proposal for the section 1332 waiver meets the
following four requirements, referred to as the statutory guardrails:
(1) The proposal will provide coverage that is at least as
comprehensive as coverage defined in section 1302(b) of the ACA and
offered through Exchanges established under title I of the ACA, as
certified by the Office of the Actuary of CMS, based on sufficient data
from the state and from comparable states about their experience with
programs created by the ACA and the provisions of the ACA that would be
waived; (2) the proposal will provide coverage and cost-sharing
protections against excessive out-of-pocket spending that are at least
as affordable for the state's residents as would be provi
[…truncated; see source link]Indexed from Federal Register on July 1, 2021.
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